The election thread - Two middle-late aged white men trying to be blokey and convincing..., same old shit, FFS.

Who will you vote for?

  • Liberals

    Votes: 0 0.0%
  • Labor

    Votes: 21 31.8%
  • Nationals

    Votes: 1 1.5%
  • Greens

    Votes: 21 31.8%
  • Independant

    Votes: 15 22.7%
  • The Clive Palmer shit show

    Votes: 4 6.1%
  • Shooters and Fishers Party

    Votes: 1 1.5%
  • One Nation

    Votes: 0 0.0%
  • Donkey/Invalid vote

    Votes: 3 4.5%

  • Total voters
    66

Squidfayce

Eats Squid
Nah. I'm with SOME still.

Lots of loans were fixed right at the bottom, for anywhere right up to 5 years. Some people who will be coming off fixed rates are people who didn't fix at the bottom and people who fixed for a short period. People who fixed say 3 years ago will more than likley be coming into lower variable rates than what their fixed rates were (can still get a variable rate of under 2%) and those that fixed at the bottom for a short period only are, well, hmmm....short-sighted shall we say.

I'll be coming off a sub 2% fixed rate in 2026. A lot can happen in that time. Could be bad, could be back to todays rates. Don't think anyone has a crystal ball that sees that far at this point.

In anycase while I think there will be some people who suffer, I think it's been overblown. Most people who would have struggled were priced out pretty swiftly in the last 24 month, and if they lied to get those loans (like many have as some UBS and ANZ surveys suggest) well, hmmm...calling it short sighted again.
 

Litenbror

Eats Squid
Nah. I'm with SOME still.

Lots of loans were fixed right at the bottom, for anywhere right up to 5 years. Some people who will be coming off fixed rates are people who didn't fix at the bottom and people who fixed for a short period. People who fixed say 3 years ago will more than likley be coming into lower variable rates than what their fixed rates were (can still get a variable rate of under 2%) and those that fixed at the bottom for a short period only are, well, hmmm....short-sighted shall we say.

I'll be coming off a sub 2% fixed rate in 2026. A lot can happen in that time. Could be bad, could be back to todays rates. Don't think anyone has a crystal ball that sees that far at this point.

In anycase while I think there will be some people who suffer, I think it's been overblown. Most people who would have struggled were priced out pretty swiftly in the last 24 month, and if they lied to get those loans (like many have as some UBS and ANZ surveys suggest) well, hmmm...calling it short sighted again.
I'm wondering if anyone knows much about other types of loans that may be affected?

I've been thinking about when I was in Northern WA and the number of FIFO workers I knew living pay to pay, no money because of the house, Landcruiser, boat, jet skis and all the rest which was all personal loans, car loans, loans sorted out by the boat yard etc was huge.

Having never really had those sort of loans will their rates increase? Will people's car payment go up or is it fixed for the life of the loan? Just wondering because if those other loans start moving at the same time I think more people will get pinched.
 

Flow-Rider

Burner
"More than half of Aussies who took out a new home loan with one of the major banks lied about their circumstances on the advice of their banker to make sure their loan was approved, shocking new research has revealed.
It found that 55 per cent of respondents who had taken a mortgage with ANZ in the six months to December 2021 had made false representations on their application, investment bank UBS’ survey showed."
/big-banks-concerning-level-of-liar-loans-revealed/news-


I would suggest that the nature of the beast is that many people would not come forward and admit to fraudulently getting a loan, so the actual figure is much higher, and that's not mentioning business, personal and overdrafts at a much higher interest rate.
 

Litenbror

Eats Squid
"More than half of Aussies who took out a new home loan with one of the major banks lied about their circumstances on the advice of their banker to make sure their loan was approved, shocking new research has revealed.
It found that 55 per cent of respondents who had taken a mortgage with ANZ in the six months to December 2021 had made false representations on their application, investment bank UBS’ survey showed."
/big-banks-concerning-level-of-liar-loans-revealed/news-


I would suggest that the nature of the beast is that many people would not come forward and admit to fraudulently getting a loan, so the actual figure is much higher, and that's not mentioning business, personal and overdrafts at a much higher interest rate.
Also gets real interesting if property prices fall and people have to start paying LMI as well.
 

Squidfayce

Eats Squid
I'm wondering if anyone knows much about other types of loans that may be affected?

I've been thinking about when I was in Northern WA and the number of FIFO workers I knew living pay to pay, no money because of the house, Landcruiser, boat, jet skis and all the rest which was all personal loans, car loans, loans sorted out by the boat yard etc was huge.

Having never really had those sort of loans will their rates increase? Will people's car payment go up or is it fixed for the life of the loan? Just wondering because if those other loans start moving at the same time I think more people will get pinched.
the other types of loans you're referring to are called fixed term/closed end loans. They are one rate for the life of the loan.
 

Squidfayce

Eats Squid
"More than half of Aussies who took out a new home loan with one of the major banks lied about their circumstances on the advice of their banker to make sure their loan was approved, shocking new research has revealed.
It found that 55 per cent of respondents who had taken a mortgage with ANZ in the six months to December 2021 had made false representations on their application, investment bank UBS’ survey showed."
/big-banks-concerning-level-of-liar-loans-revealed/news-


I would suggest that the nature of the beast is that many people would not come forward and admit to fraudulently getting a loan, so the actual figure is much higher, and that's not mentioning business, personal and overdrafts at a much higher interest rate.
its funny that they say "shocking new research" This research has been done on and off for years. and when its not your bank asking you these questions, people really open up.

Though some of the data points that count towards being classed as a "liar loan" are as basic as not including your weekly $200 smashfest at the pub under your "entertainment expenses" and saying you only spend $100 a month on entertainment. The net effect is you may be eligible for more credit for a home loan butyou technically still have that smashfest money to spend on your mortgage rather than at the pub when push comes to shove.

Its not as dire as people lying wholesale about what they earn and providing fake pay slips etc. (though that does happen, its easily verifiable). Where its can get dicey is people seriously underestimate or understate their necessities budget, like food bills, transport, health etc.. Again that does happen, but is also verifiable. Heaps of services exist that scrape bank data to compare what your transactions say vs what you said on your application. Most lenders use some form of this technology these days (at least since the last 5-7 years?) and the results can be spat out in a matter of seconds/minutes.

Banks telling people to lie on their applications can be from something as shiteful as conflicted remuneration ifor brokers/bank sales staff or can also be a helpful bank employee who is helping a client get past a stupidly conservative credit rule of an automated credit decision engine.
 

Flow-Rider

Burner
Also gets real interesting if property prices fall and people have to start paying LMI as well.
I don't even want to think about that, but I think at this point in time that the housing market is fairly stable, foreign investment will start to pick up again now that Covid is under a bit of control.
 

Flow-Rider

Burner
its funny that they say "shocking new research" This research has been done on and off for years. and when its not your bank asking you these questions, people really open up.

Though some of the data points that count towards being classed as a "liar loan" are as basic as not including your weekly $200 smashfest at the pub under your "entertainment expenses" and saying you only spend $100 a month on entertainment. The net effect is you may be eligible for more credit for a home loan butyou technically still have that smashfest money to spend on your mortgage rather than at the pub when push comes to shove.

Its not as dire as people lying wholesale about what they earn and providing fake pay slips etc. (though that does happen, its easily verifiable). Where its can get dicey is people seriously underestimate or understate their necessities budget, like food bills, transport, health etc.. Again that does happen, but is also verifiable. Heaps of services exist that scrape bank data to compare what your transactions say vs what you said on your application. Most lenders use some form of this technology these days (at least since the last 5-7 years?) and the results can be spat out in a matter of seconds/minutes.

Banks telling people to lie on their applications can be from something as shiteful as conflicted remuneration ifor brokers/bank sales staff or can also be a helpful bank employee who is helping a client get past a stupidly conservative credit rule of an automated credit decision engine.
Banks don't care less if they know they can always recoup their money back, I was offered up to a 1 million dollar home loan back in 2005 on a net wage of $650 a week because of the amount of deposit I had.
 

Squidfayce

Eats Squid
Also gets real interesting if property prices fall and people have to start paying LMI as well.
you pay LMI upfront to an insurer (QBE or genworth - som ebanks self insure) when you buy house with less than 20% deposit not when house prices fall. Capitalise it into the loan if you want. The purpose of the LMI is to protect the bank in the event the customer defaults and they have to foreclose on a home and sell it. High LVR loans like 95% lends tend to sell at a loss when banks have to repo them early before equity is built. The LMI pays the bank the loss difference to the max value of the remaining 20% that would have made up the 20% deposit.

House pricess falling are arguably a good thing for people who dont have a 20% deposit. They could be closer to not having to pay LMI. Though with the govt 15% backing many can avoid it as it is anyway still with a 5% deposit.

LMI is not a bad thing either. media makes it out as a hurdle but its not. its a life saver in some circumstances. I think i bought my first house with 5k down (was a 97% loan). paid 11k LMI, capitalised it into the loan. 8 years later that house paid for itself and gave atax free profit for the next one of 350k. If id waited to save the remainder of the 20% i wouldn't have been able to aford the house. The media are fucking retards when it comes to this stuff. and litterally scaring young people off from trying.
 

Squidfayce

Eats Squid
Banks don't care less if they know they can always recoup their money back, I was offered up to a 1 million dollar home loan back in 2005 on a net wage of $650 a week because of the amount of deposit I had.
in 2005, lending laws werent as strict and we didnt have the national consumer protection act and responsible lending regulations. Ever since the GFC, things are a little different.

Edit - I remember pre gfc, lenders were lending OVER the value of the house (like lvrs of up to 150%) so people could get their new homes furnished, or renovated, have a pool put in, buy the new car or two. Was fucking crazy.
 
Last edited:

PJO

in me vL comy
Where its can get dicey is people seriously underestimate or understate their necessities budget, like food bills, transport, health etc
I think you can safely say that everyone underestimated these since cost of living is going up due to inflation, but I agree I don't think we are going to get swathes of foreclosures anytime soon. Only if inflation and thus rates keep marching upwards for a year or maybe two are we likely to see things getting dicey for some...
 

Litenbror

Eats Squid
you pay LMI upfront to an insurer (QBE or genworth - som ebanks self insure) when you buy house with less than 20% deposit not when house prices fall. Capitalise it into the loan if you want. The purpose of the LMI is to protect the bank in the event the customer defaults and they have to foreclose on a home and sell it. High LVR loans like 95% lends tend to sell at a loss when banks have to repo them early before equity is built. The LMI pays the bank the loss difference to the max value of the remaining 20% that would have made up the 20% deposit.

House pricess falling are arguably a good thing for people who dont have a 20% deposit. They could be closer to not having to pay LMI. Though with the govt 15% backing many can avoid it as it is anyway still with a 5% deposit.

LMI is not a bad thing either. media makes it out as a hurdle but its not. its a life saver in some circumstances. I think i bought my first house with 5k down (was a 97% loan). paid 11k LMI, capitalised it into the loan. 8 years later that house paid for itself and gave atax free profit for the next one of 350k. If id waited to save the remainder of the 20% i wouldn't have been able to aford the house. The media are fucking retards when it comes to this stuff. and litterally scaring young people off from trying.
Ah I am working of mortgage knowledge from the States where LMI is paid monthly and comes off when you reach the 20% threshold. If the property price drops there and the house value + your repayments no longer meet threshold of the loan amount they will start charging you again.
 

Squidfayce

Eats Squid
Ah I am working of mortgage knowledge from the States where LMI is paid monthly and comes off when you reach the 20% threshold. If the property price drops there and the house value + your repayments no longer meet threshold of the loan amount they will start charging you again.
Ah interesting concept! Here we hit you up front, then if you capitalise it the bank mKes more money off you. It's kind of perverse, but it works (in a rising market anyway)
 

Litenbror

Eats Squid
I think you can safely say that everyone underestimated these since cost of living is going up due to inflation, but I agree I don't think we are going to get swathes of foreclosures anytime soon. Only if inflation and thus rates keep marching upwards for a year or maybe two are we likely to see things getting dicey for some...
How do we think interest rates will affect investors who use low interest and rising property prices to skim the equity of the property and claim the interest as a tax deduction. This model would not work great with rising rates and even flat prices. I have seen this model spruked by numerous property investment types.

After the recent senate inquiry couldn't even work out how many Australian properties were owned by overseas investors I have no idea if we have the granularity of the market to know how many investors who have little to nothing invested in the properties might walk away. This is how much of the US crash started (at a local level where we lived) with investors just walking away.

Not saying this is what could/would happen here but would be good to know the make up of the entire market.
 

Squidfayce

Eats Squid
I think you can safely say that everyone underestimated these since cost of living is going up due to inflation, but I agree I don't think we are going to get swathes of foreclosures anytime soon. Only if inflation and thus rates keep marching upwards for a year or maybe two are we likely to see things getting dicey for some...
Th3 current Sharp uptick in cost of living is only recent though and people have been lying on their loans forever.

You're assessed at a stressed rate anyway which is 2-3% above the rate you've applied for so the bank is comfortable you can afford several rises. The indirect benefit being that you have time to make decisions as your circumstances change.
 

Squidfayce

Eats Squid
How do we think interest rates will affect investors who use low interest and rising property prices to skim the equity of the property and claim the interest as a tax deduction. This model would not work great with rising rates and even flat prices. I have seen this model spruked by numerous property investment types.
OF course it works. Most of those investors already hold properties that have been sky rocketing. So even as they flatten out, or even drop they already have the crazy equity earned.

So they could take that current equity and use it to invest elsewhere. Or even take a gamble on inner metro apartments in anticipation of student and foriegners flooding back.

Where it won't work is if you were buying now at the top end of the market and even then probably only in the short term.


Claiming interest on investments is no different to claiming expenses on stock for your business you use to make a living. You still have to pay tax on any positive income you mKe either from positively geared property or capital gains when you sell.



After the recent senate inquiry couldn't even work out how many Australian properties were owned by overseas investors I have no idea if we have the granularity of the market to know how many investors who have little to nothing invested in the properties might walk away. This is how much of the US crash started (at a local level where we lived) with investors just walking away.

Not saying this is what could/would happen here but would be good to know the make up of the entire market.
This one is interesting. Because much of the foreign investment in Australian property is bought via Australian citizens acting as proxies for those foreigners.

I used to work for a business that actively ignored this. You're a part time barista with 19 properties, and you want to buy another? No worries!

Strange how all these mega wealthy baristas and dishwashers are all of one particular demographic. Nothing sus.

There's actually several outfits that make income payments to these proxies' bank accounts for months to seed some of the information that needs to be verified. But after you see 500 customers who all get paid by the same group, you start poking around a bit. On3 such group was a property investment group out of China litterally not hiding it. The bank statements didn't even have outgoing expenses, just a regular income and growing balance. Think anyone asked about why that might be? Nope. Give them house number 20. Fucking rediculous
 
Last edited:
Top