[Podcast] Understanding the changing game of property finance with Andrew Mirams

You heard me say it before - property investment is a game of finance with some houses thrown in the middle.

But the rules of the game are changing in front of our eyes, so today I’d like to explain what’s going on with lending, so you have a better chance of the banks saying “yes” to you and lending you more money, with leading finance strategist Andrew Mirams, director of Intuitive finance.

I plan to ask him a number of the common finance questions we’re asked when clients come to see us at Metropole, but I’m also going to ask Andrew some of the questions you probably wouldn’t even think of asking but are important to know the answers to in today’s financial climate, so that at the end of today so you’ll have a better understanding of how to approach the game of property finance.

The changing game of property finance with Andrew Mirams

• What’s actually happening in the world of finance? Are the banks open for business?
  • The banks are always open for business.
  • They’ve actually been pretty good through the pandemic.
  • They’re working on more responsible lending.
• Are they still talking about loosening the purse strings a bit?
  • Lending restrictions have been over the top a little bit and probably need more scrutiny.
• Why is it taking longer to get preapprovals?
  • Applications to banks have gone up a lot mostly due to first-home buyers and now investors are coming back as well.
  • Also, lots of workforces are offshore
• We discuss some preapproval conditions borrowers need to understand
• It’s important to understand where banks are willing to lend – they restrict lending for certain postcodes and types of property
• Bank loan officers don’t necessarily understand business.
  • You can’t go to a bank to get property advice
  • The right time to invest is when it’s right for you
• Interest rates are important, but the right loan rate is more important. Online lenders aren’t necessarily the right answer.
• A finance strategy is much more than an interest rate or fees.
  • Banks are looking at your serviceability as much as your equity.
• Loan insurance can entice banks to increase the loan, but it protects the bank, not you, and loan insurance costs.
  • So, you have to find a sweet spot that gives you the amount you need without paying too much for the loan.

Resources:

Michael Yardney

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Andrew Mirams Director Intuitive Finance

Some of our favorite quotes from the show:

“I believe it’s important to have a preapproval in place before you go out into the market.” – Michael Yardney

“I don’t think you should assume the bank is on your side.” – Michael Yardney

“If you do the easy things now, you’re going to have a hard life later; if you do the hard things now, you’re going to have an easy life later.” – Michael Yardney

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