Nerfonomics

Squidfayce

Eats Squid
I don't do apartments, too many problems with strata issues and building issues, but saying that some people do well out of them.


You're more of a prospect with brokers if you've held a stable job unless you've doubled your salary. I've heard of a few people getting knocked back after changing jobs, even after 6 months.
Shit brokers then. I've had extensive dealings with brokers on both ends of the equation. Great brokers can rationalise a deal like no tomorrow. It's also worth noting some broker deals get nocked back because the lender doesn't like the broker, the broker then tells the client its the clients position that's the problem.

Brokers are either honest or they are dodgy. It's about a 50/50 split and the dodgy brokers, even when they put good deals in that haven't been massaged in any way will often get rejected on gut feel. Lender doesn't have to disclose why - it doesn't meet lending criteria is all they say. What's the lending criteria? Sorry commercially sensitive information.

That said the 6 month rule is irrelevant if you've changed industry. I've you've been in say IT for 10 years and you've just passed probation on Nother IT job, there really is no risk.
 

pink poodle

気が狂っている男
Lenders favour people that have been in the same job for 2 years or longer, I wouldn't move until you secure a loan.
My last refinance (may/June '21) they were throwing cash at me! They didn't care that I only had casual work or that my income fluctuates significantly across the year. They wanted me to have been with an employer for at least 6 months, provide year to date income, and provide a weekly expenses budget that they checked off against my bank statement. I found this plan to be really easy to get compared to other times. The only issue was that they took so long to decide that instead of having it dialled before the end of financial year it carried over into the first week of July.

Different personal circumstances etc come into, but if you're in a good financial position t begin with it shouldn't be too hard to get the ball rolling.
 

Flow-Rider

Burner
My last refinance (may/June '21) they were throwing cash at me! They didn't care that I only had casual work or that my income fluctuates significantly across the year. They wanted me to have been with an employer for at least 6 months, provide year to date income, and provide a weekly expenses budget that they checked off against my bank statement. I found this plan to be really easy to get compared to other times. The only issue was that they took so long to decide that instead of having it dialled before the end of financial year it carried over into the first week of July.

Different personal circumstances etc come into, but if you're in a good financial position t begin with it shouldn't be too hard to get the ball rolling.
You already own though aye?
 

Squidfayce

Eats Squid
You already own though aye?
My last refinance
Though this has little to do with it. The threshold for being approved for a loan is that after all your expenses, you can evidence you have the ability to pay the loan at a stressed rate of anywhere up to 2.5-3% above the advertised or offered rate This is where heaps of people fall over.

$500k loan at 4.16% is $2433 p/m. at 7.16% its $3380. You've applied for 4.16% but the bank asses you at 7.16%. So unless you have a spare 1k after all your expenses are factored in, you're not getting approved. That's regardless of whether you own already. That's why there's talk about people being trapped in mortgages after their fixed rates expire. Because the rates by then could be standard 6% and the bank is assessing you at 9%. Make sense?

and this is obviously easier to achieve on an ongoing basis for people who bought a house for 300k 8 years ago than somone who bought the same one this year for 650k. This is the basis of the ever increasing wealth divide. Whoever sold their 300k house for 650k ofsets the increase in house price rises on their new purchase from the cap gain tax free profits of the last. Or you're lucky and you earn enough to have more than one etc. The wealth effect is compounding. And this is why i say, if you can afford one today, fucking do it. eat noodles for 2 years after if you have to, just do it because its not going to get easier.
 
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pink poodle

気が狂っている男
You already own though aye?
6 months was their position for anyone. Everything beyond that was based on my personal circumstances.

Funny side note - my payslips contain a wide range of allowances each week. This caused the lender a bit of confusion because of the strange way it is all laid out.
 

Flow-Rider

Burner
Though this has little to do with it. The threshold for being approved for a loan is that after all your expenses, you can evidence you have the ability to pay the loan at a stressed rate of anywhere up to 2.5-3% above the advertised or offered rate This is where heaps of people fall over.

$500k loan at 4.16% is $2433 p/m. at 7.16% its $3380. You've applied for 4.16% but the bank asses you at 7.16%. So unless you have a spare 1k after all your expenses are factored in, you're not getting approved. That's regardless of whether you own already. That's why there's talk about people being trapped in mortgages after their fixed rates expire. Because the rates by then could be standard 6% and the bank is assessing you at 9%. Make sense?

and this is obviously easier to achieve on an ongoing basis for people who bought a house for 300k 8 years ago than somone who bought the same one this year for 650k. This is the basis of the ever increasing wealth divide. Whoever sold their 300k house for 650k ofsets the increase in house price rises on their new purchase from the cap gain tax free profits of the last. Or you're lucky and you earn enough to have more than one etc. The wealth effect is compounding. And this is why i say, if you can afford one today, fucking do it. eat noodles for 2 years after if you have to, just do it because its not going to get easier.
If you already owned a home and it had accumulated 500k in value and then took out a loan to buy a bigger home for 200k extra, it's a bit different from someone taking out a loan for 700k with a 140k deposit.
 

Squidfayce

Eats Squid
If you already owned a home and it had accumulated 500k in value and then took out a loan to buy a bigger home for 200k extra, it's a bit different from someone taking out a loan for 700k with a 140k deposit.
not if you cant afford to pay the new loan at the stressed rate after expenses.

Your asset position doesnt equal capacity to pay

Sure paying principle on 200k more rather than the full 700k will be less. That's the point i was making about a the increasing wealth divide. But you cant use the excuse of missing the boat as an excuse to miss the next one too if you can afford it. Otherwise you're gonna be swimming forever.
 
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Flow-Rider

Burner
not if you cant afford to pay the loan at the stressed rate after expenses.

Your asset position doesnt equal capacity to pay
If you had sold the first home with 500k equity to buy the second home, your loan isn't going to be as high as someone buying their first with a 20% deposit if they're competing for the same home of the value of 700k. I also know for a fact that banks ask you what assets you have when you take out a loan, so they do take it into consideration, the last loan I had they actually listed it on my preapproval.

House prices ATM are going into reverse, why pay top dollar unless you are paying high rent, in most cases best of waiting for another few months, most people would still need to pay their lease out anyway. It's up to the individual to do their own research to see what position they're in and see if it's going to benefit them but I wouldn't be telling anyone to buy when most values are going into reverse for the next few months.
 

jrewing

Eats Squid
Brisbane is a nightmare ATM, I've never seen low vacancy rates like this in all my life. There are usually 240~450 houses up for rent in my area at any one time, now down to 15.
Tasmania the same. Our rental in nth beaches sydney went in 2 days. Had a guy offer a 4 year lease.
Over Covid our Darling Pt unit sat for ages. Im putting the rent up a fair bit as I took a hit with the new lease. Revenge time in February!
 

Squidfayce

Eats Squid
If you had sold the first home with 500k equity to buy the second home, your loan isn't going to be as high as someone buying their first with a 20% deposit if they're competing for the same home of the value of 700k. I also know for a fact that banks ask you what assets you have when you take out a loan, so they do take it into consideration, the last loan I had they actually listed it on my preapproval.
Banks ask you what assets you have so they can work out your debt/equity and debt/income ratios. They need to know if you go bad, whether they can they take you for more than just the house. to recover any shortfalls. And they do. Trust me. Also to use as a basis for their investigations into your financial position. ie, did you disclose everything? If you didnt, theyl ask you about it and if you lie and they know otherwise, youre going on a fraud register every lender has access to and you wont get shit for years. It's ultimately to determine what your final position would be in a worst case scenario. This is part of assessing the credit or lending risk. They also use this information to cross check some of your claims - ie how much super you have based on age and occupation/industry can tell the bank whether you're bullshitting them about other aspects of your income and employment history. If you have more assets than your profile suggests you should, you may be flagged for a bit of a please explain (e.g. how as a 25 year old part time barista you own 7 homes, a ferari and a watch collection worth 120k is kind of a red flag). The loan may not be higher in the example you gave, but the bank sure as shit wont give you a 200k loan if you cant pay a 200k loan at todays stressed rate on the basis that you passed an assessment 5 years ago at a different stressed rate but now you now have assets.

Banks have to abide by various responsible lending obligations that factor in shit today that they didn't have to 5-10 years ago. If you don't meet the criteria, they wont give you a cent even if you think you can pay it or have been paying it for the last 10 years.

Someone with a 140k deposit and no assets with a high disposable income after all expenses that meets the stressed rate will get the loan no issue. Assets are not cashflow. If you cant pay the loan, you could own the Taj Mahal and it wouldn't make a difference.

House prices ATM are going into reverse, why pay top dollar unless you are paying high rent, in most cases best of waiting for another few months, most people would still need to pay their lease out anyway. It's up to the individual to do their own research to see what position they're in and see if it's going to benefit them but I wouldn't be telling anyone to buy when most values are going into reverse for the next few months.
people can do whatever they want. I could care less. But"Top dollar" is relative. Buying a house in a few months has zero guarantee to be cheaper or more affordable than it is today. The speed at which the rates have risen since april has reduced the borrowing capacity of many people at a rate that outstrips the drop in value across most of the market still. Basically you can only borrow less than before and what you can get for what you can borrow is less than what it was. AND you're paying more for it. Whats Top Dollar now? Every time that rate goes up, you can borrow less, and factoring in inflation into the expenses calculations, your income is assessed as less too. That trend is accelerating on the way to the bottom. That's not a desirable entry point unless you're cashed up/ excellent disposable income.

House prices in aggregate are going in reverse. Not all houses are losing value. I've explained this in a prior post. Buying now doesn't mean you HAVE to buy somewhere at a loss. But if you do, you're not making a loss in in the long term. If you're holding for +10 years, you're going to make money. The difference is is that now you have less competition. Buyers market and all. Auctions routinely passed in, motivated /stressed sellers, lots of stock etc.. Do you not recall that as little as a year ago and for several years prior to that, people were losing out on auctions week in week out to more cashed up buyers? First home owners deposits were being eroded faster than they could maintain them while they did the house search grind every weakened for years. When the market turns, that's going to be the same problem, but in an environment with higher rates. Higher rates, higher house prices, lower affordability. That's the basis for me saying if you can afford it now, then do it, because you may find what you can afford when the market turns is less than you can today.

What do i know? It's not like I have been doing this shit for 20 years or anything lol
 
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Flow-Rider

Burner
A few of us were talking about this a while ago on here.

Big tech companies are moving production out of China over geostrategic concerns


A recent political risk survey conducted by Willis Towers Watson found that 95 per cent of multinational corporations are concerned about China. That’s up from 62 per cent in 2020.

“Overwhelming majorities of respondents believed that trends towards geostrategic competition and economic decoupling between China and the West would intensify in the future,” the report reads.

“A majority of respondents expressed concern that private companies would be targeted in international diplomatic disputes.”
And it’s this risk of becoming a political plaything - just as Europe’s gas economy has been manipulated by Moscow - compelling corporations to move.

Apple is switching some of its iPhone production to India. Its AirPods, Apple Watch and iPads are going to Vietnam.

Amazon is now getting its FireTV devices from India. And it recently closed its Chinese Kindle facility.

Samsung led the charge in 2019 by shifting its manufacturing to Vietnam. Now Microsoft and Google are following suit with their Xbox Pixel phone production.
 

Nerf Herder

Wheel size expert

This is a hard watch … I can see the guest’s points … but not sure I fully agree.
That said not opposed to a singular initial focus on Money Supply.

but I see much like interest rate or inflation targeting … MS targeting is also a blunt tool and not the only reason for inflation. Also disagree with the ‘Not a global’ aspect especially now and focusing on the Australian experience.

In general, he is an expert, but he answered incorrectly on a few occasions to further his argument. Or more generously, he incompletely explained to Validate his position and direct the conversation.
 
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