Talking Concepts
December 2022
THINGS EVERY FIRST HOME BUYER SHOULD KNOW
With research showing that a majority of first home buyers (FHBs) are financially illiterate, Resolve Finance managing director Don Crellin outlines the things that all brokers should tell FHBs before they take the plunge.
Lenders mortgage insurance (LMI) covers the lender in the event of not recovering the full loan balance from the borrower who, for whatever reason, becomes unable to meet their loan payments.
There are additional costs to factor in other than the purchase price of a property: such as stamp duty, conveyancing and legal fees, pest and building inspection fees, mortgage registration and transfer fee, loan application or establishment fee, LMI, council and water rates. These may need to be subtracted from their deposit.
While buyers have the ability to get a bargain at auction, there is no “cooling-of ‘ period on an auction buy. They also need to pay a sizeable deposit, usually 10% at the fall of the hammer.
Conveyancing is the process of transferring ownership of a legal title of land (property) from one person or entity to another. It typically consists of three stages: before contract, before completion, after completion. It is wise to engage a conveyancer to handle this process.
If buying a new home is a marathon, settlement is the finish line. It’s where legal possession of the property is taken via a process which includes: conducting a pre-settlement (or final) inspection, checking and signing the transfer documents, registering the transfer of ownership with the relevant government agency and making final payment to the seller. Most people use a conveyancer or solicitor to assist them through settlement, which generally takes between one and four months.
An offset account is a savings account or transaction account linked to the home loan account. The account’s balance is “offset” daily against the home loan balance, and as a result, the buyer is only charged interest on the difference between the two. When it comes to a home loan, savings can accrue to a big difference over time.
A mortgage broker helps customers identify the most appropriate lender and product for their unique situation. A broker negotiates the home loan on a buyer’s behalf, does all the legwork on researching the loan products, and supports clients through the application and settlement process. In addition, a reputable mortgage broker should guide a buyer on becoming financially literate.
Staff Updates
We are excited to announce that Krissa from our Accounting team has given birth to her first child, a beautiful little girl named Aiah!
We are excited to welcome Ashlee into our Administration team!
Secretarial Fee Increase
As at the 1st January 2023 our annual secretarial fee will increase from $240 plus GST to $250 plus GST.
This annual fee covers
- Download Company Annual Statement from Australian Securities & Investment Commission
- Preliminary review of Company Annual Statement
- Preparation of Company Statement & Solvency Resolution
- Attendance to compliance issues
- Maintenance of Register for 12 month period
Dates to Remember
23rd December 2022 – Office closed
11th January 2023 – Office re-opens
Interest Rates
Interest Rates that start from…
4.69% p/a Variable Rate
4.72% p/a Comparison Rate
Based on our lender panel, BankFirst’s Variable Rate, provides the most competitive Interest Rate. Interest rates are correct as at 20/12/2022 and subject to change at anytime. The comparison rate is based on a loan amount of $250,000, over a 30 year term. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees and other loan amounts might result in a different comparison rate. Terms, conditions, fees and charges apply and your full financial situation would need to be reviewed prior to acceptance of any offer or product.
Revised working from home methods for 2022–23
Source: CPA Tax News 3 November 2022 Edition 40
From 1 July 2022, the methods for claiming working from home expenses have changed. The 80 cents per hour COVID-19 shortcut method is not available for 2022-23 (i.e., from 1 July 2022).
The ATO has published a draft which outlines its proposed changes to the fixed rate method.
The rate is increasing from 52 cents to 67 cents per hour. In addition to heating, lighting and cleaning costs, the revised method now also includes expenses related to:
Home and/or mobile phone and internet, and
Computer consumables and stationery.
Taxpayers now do not need to have a separate home office or dedicated work area set aside in their home to use the revised 67 cents per hour fixed rate method.
ATO compliance approach
The ATO will not apply compliance resources to review deduction for working from home expenses if taxpayers:
Meet the criteria of claiming working from home
Use the revised fixed-rate method to calculate the additional running expenses incurred as a result of working from home.
Record keeping requirements
For the 2022–23 income year only, you need to keep:
A record which is representative of the total number of hours worked from home during the period from 1 July 2022 to 31 December 2022, and
A record of the total number of actual hours you worked from home for the period 1 January 2023 to 30 June 2023.
For the 2023–24 and later income years, you must keep a record for the entire income year of the number of hours you worked from home during that income year. An estimate for the entire income year or an estimate based on the number of hours you work from home during a particular period and applied to the rest of the income year will not be accepted.
A record of your hours for the income year can be in the form of:
Timesheets
Rosters
A diary or similar document kept contemporaneously.
Christmas Cracker Jokes
What do Santa’s elves learn in school?
The elf-abet.
Who’s Santa’s favorite singer?
Elfish Presley
What was the Christmas tree’s favorite shape?
A treeangle!
Helping you transact online
Source: Macquarie Cash Management Accounts
With fraud becoming more sophisticated, Macquarie Bank are continuing to invest in the latest technology to keep your personal information and accounts safe.
Macquarie Online Banking helps you manage your everyday transactions, with two-step authentication providing an extra layer of security that helps protect your account from unauthorised access.
What does this mean for me?
From Wednesday 1 March 2023, Macquarie Bank will no longer accept paper signed requests for withdrawal amounts under $100,000 for Macquarie Cash, Vision Cash and Investment Wrap accounts. This includes requests using the Macquarie Withdrawal Form and the Recurring Payment Form.
Instead you’ll be able to make withdrawals yourself via our online and mobile banking platforms.
If you currently make transactions online
You can continue to use Macquarie Online Banking and make payments via Macquarie Authenticator, as this change will not impact you.
If you're not transacting online yet
Make the switch early by accessing our online banking platforms and securely authorise payments and account activity with the Macquarie Authenticator app, our most secure and recommended verification system.
To access Macquarie Online Banking, go to macquarie.com.au and select ‘Log in’. From the login page you can select ‘New to Macquarie?’ to register with your Macquarie ID and mobile number. If you’ve forgotten your login details, you can click on the ‘Forgot log in details?’ to reset your Macquarie ID and/or password.
C&R is going Paperless
At the beginning of 2019 the team at Concepts & Results made a commitment to be completely paperless, and we are nearly there. Closing the office during COVID slowed the process, but we are on track to hopefully be completely paperless within the next six months.
We are currently scanning the Company, and Trust Compendiums, which is our final stage. If you have a Trust or Security (Bare) Company you will receive in the mail the original Trust Deed/Settled Sum/Security Deed for safekeeping. The only time you are usually required to provide the original document is when opening a bank account or settling a property. C&R have all the documents scanned electronically and can provide certified copies when and if required.
KNOW HOW MUCH YOU CAN BORROW
Careful consideration about your home loan size will help make a more comfortable and stress free mortgage
When it comes to buying a home, one of the first questions you need to ask is: “How much can I borrow?”
While your lender will make the final assessment concerning how much they are prepared to lend, it is essential that you make your own assessment of your finances first. Your goal is to determine what you can comfortably afford to repay towards your mortgage each month – this will then help
establish what you are able to borrow.
Ins and outs
The best place to start is to add up all your regular monthly outgoings and then subtract this from your net income. Your outgoings include any regular
commitments such as car or personal loans, credit card and store card repayments. Also add up other regular costs such as school fees, club memberships, monthly living expenses and your monthly discretionary spending.
Do not include your current rental commitments into these figures. It will no longer be relevant once you move into your new home as you’ll be paying off your mortgage. Now look at your income. This should include your after tax salary, dividends on investments, rental income and any other funds that flow in over the course of the month. The dollar amount you’re left with will give you an indication on what you have available to pay towards your mortgage each month as things currently stand.
Rising waters
The most important factor to consider is that if you have a variable home loan rate your mortgage repayments will increase as interest rates start to climb. Try and factor an additional one percent of the current interest rate into your mortgage repayment and household expenses, in order to prepare for additional repayments should rates rise in the future.
Lifestyle
It’s also essential that you consider exactly how much you are prepared to let your home loan change your life. The benefit of assessing your borrowing capacity is really twofold – to ensure that you don’t borrow beyond your means but also to help identify where you can realistically cut back if needed.
Future plans
Lastly, be sure to take into consideration other personal factors, such as plans to have a family, or any dreams to travel. For more information about finding a suitable home loan product that will suit your lifestyle and future goals, feel free to give us a call.
C&R Online Meetings
As you may well know, C&R have 3 methods of scheduling our client meetings; In the office face to face, via Telephone and Online face to face.
As of next year, C&R will be replacing our Online meeting software from Go to Meeting, to Webex. Our process will remain the same so should you request an Online meeting, you will receive an email confirmation with the link to Webex’s meeting room and two SMS reminders; 24 hours prior and 30 minutes before your meeting.
Since C&R is predominantly online, our preferred method is via Webex, however we are of course happy to meet you all in the office face to face when requested.
SUPERANNUATION
Hiring holiday employees? Be aware of changes to super
ATO reminds employers who hire staff on a short-term or occasional basis, that they need to be aware of recent changes to super guarantee (SG). The changes mean more of their employees may be eligible for super.
The changes started on 1 July 2022, with the need to pay super for employees at a rate of 10.5%, regardless of how much they earn, because the $450-per-month threshold for SG eligibility has been removed.
They should also be mindful of other eligibility requirements for SG – particularly if they hire workers who are under 18 years old. These workers still need to work more than 30 hours in a week to be eligible for SG.
The prevalence of cybercrime continues to grow
Source Accountancy Insurance
Medibank, AHM, and Optus are recent high-profile examples of just how impactful and widespread cybercrime can be on the lives of everyday Australians.
Although it might seem like this only happens to big business, cybercrime impacts smaller businesses just as easily.
Small vs big business.
In many cases, smaller businesses are more desirable targets than big business.
Small businesses hold all the information that big business has, but often do not have the resources to invest in the best software and hardware to protect their data.
But small businesses still need to protect their client data and implement a strategy to reduce the impact if a cyber attack occurs.
Now is the time to ramp up your cyber security. Regardless of the size of your business. It is becoming increasingly apparent that it is no longer a case of if but when you may become a victim of cybercrime.
Preparation is key. Businesses should assess their preparedness for a cybercrime incident and review their response and business continuity plans.
Not only can a cyber breach cause major disruption to your business, but the costs also involved on your operations, reporting and reputation can be substantial.
Our tips to ensure your network is secure against cybercrime
- Make sure operating systems and security patches are up to date.
- Apply multi-factor authentication.
- Regularly backup and store those backups offline.
- Create complex passwords; always upload the Apple or Android security updates.
Reporting a breach
Rather than trying to hide a breach, today most companies will come out and say something like:
We have experienced a ransomware attack. Here’s what we’re doing to contain it, remediate it, protect consumer information, and this is how we’re planning to strengthen our systems going forward to make sure it doesn’t happen again
PAY YOUR LOAN OFF SOONER
DON’T BELIEVE WHAT THE BANKS TELL YOU. YOU CAN PAY OFF A 30 YEAR HOME LOAN IN LESS THAN 12 YEARS.
Don’t Pay Expensive Consulting Fees
Most mortgage consultants charge thousands of dollars to show you what the banks should have in the first place!
It’s Not That Hard
With the right type of loan, the right tools and a broker who is committed in helping you pay off your loan sooner all the work is done for you.
The Solution
A service that offers mortgages that the banks have, but reluctantly discuss with you, plus all the advise you need at absolutely no cost to you , thus avoiding expensive consultants fees.
This free Home Loan Repayment System Service is called Xcellerator Plus.
The system puts the right loan and easy to use technology to deliver a process that helps you pay off your home loan sooner…
And it’s all free.
If you wish to find out more BOOK A FREE Home Loan Strategy Session by making an inquiry on this page today.
The strategic session is normally held via phone or Skype, and will typically take place within a day of your initial inquiry.
During this session you will see exactly how Xcellerator Plus works in real time, live, specific to you and more importantly it will cost you nothing at all.
To set up a time for your 30 Minute Home Loan Strategy Session, please complete the form on your right, or call us on 03 9569 5676.
RELAY FOR LIFE
We all know someone personally who has been effected by Cancer so after a 2 year hiatus due to COVID, we are back with Relay for Life, raising funds for the Cancer Council and this time we are “Legging it for Loved Ones”!!
On Friday the 3rd March 2023 our team will be walking for 24 hours to raise valuable funds for Cancer Council research and support.
To donate to our team go to – https://www.relayforlife.org.au/fundraiser/conceptsresults
If you would like to join in the fun and walk with our team, please join us at Akoonah Park, Berwick from 6pm on Friday 3rd March. We welcome anyone to come along and walk with us for however long you want to.
Visit us
Want to discuss the above face to face? Come visit our specialised team members to find out more.
612 Warrigal Road, East Malvern PO Box 61, Holmesglen, Vic 3148
Call us
Have any questions? Further discussions on the above can be may be held over a telephone appointment.
(03) 9569 5676
Contact us
For any and all queries regarding the above, you may contact Concepts & Reuslts by emailing us
concepts@cr.com.au