05
May 2016

Busting the broker myths

Busting the broker myths

Written by Hudson Editor Hayley Mcleod


1)      It costs too much to use a broker.

I hear a lot of people say they won't use a mortgage broker because they can't afford it and I have never understood this as most mortgage brokers don't charge for their services. This is actually one of many myths surrounding mortgage brokers. Over 60% of home buyers think that getting a mortgage through a broker will cost them more due to the commissions that are paid to brokers.

Mortgage brokers receive commission from the banks that you get your loan through (it is payment in exchange for the referral). The commission received is a small percentage of the loan you take out. This figure is NOT added to your loan or paid by clients in anyway. In fact in many cases using a mortgage broker can cost you less as banks are constantly competing for your business and many will do this via a broker with increased incentives such as a waiver of fees, rebates and low interest rates etc.

2)      It is too time consuming to use a broker.

When you deal with the finance department at Hudson Financial Planning you will find the process uncomplicated and stress free, this is because we do most of the work for you. Following a phone call with our Mortgage Broker Matthew Kerr we will email you a comprehensive checklist of the documents we require from you. We will then order valuations, get the best rates on offer and look for the best loan that suits you.

Our loan processing team will then prepare all of your documents and email them to you in one easy file for you to print off and sign. Once you have emailed these completed documents back to us we will submit the loan on your behalf. This process can be done in a couple of days for urgent loan approvals.

3)      The banks won’t be happy if I use a broker.

Banks get their money either way, if you are an existing customer they may try and keep you on board with a lower interest rate but they won’t do loan comparisons for you like we will. Everyone’s circumstances are different and it is important that you find the right loan with the right product that suits you in the long term, not the short term.

4)      If your bank won’t give you a loan we can’t help you.

This isn’t always the case. Every bank is different and offers different rates and products. Your bank may not be able to offer you a loan using your business as security whereas another can. Some banks don’t like offering loans to self-employed workers while others offer this flexibility. This is why it is best to come to a mortgage broker as we know which banks offer the best products for your requirements.

Why and who can use the Hudson Financial Planning finance department?

-          You DO NOT have to be a member to utilise the services of our Hudson Finance Department. Anyone can give us a call to discuss their loan or refinance requirements.

-          In most circumstances we can offer you a better interest rate than your bank by utilising the many banks that we work with. We DO NOT only deal with the big four and will look outside the box to get you the best rate.

-          We can work with you to work on the right loan structure for your requirements. Investment loans are offered at a higher interest rate than an owner occupied loan and getting this structure right is important to your future repayments.

-          Mortgage brokers are offered incentives to bring in customers. Specific brokers, such as Hudson, are often offered deals such as fee waivers and refinance discounts to get new customers on board. While these offers do not sway us to use a particular lender if we feel the package is right for you these offers will definitely save you money in the future.

-          We can offer you a full service with our specialised team of real estate agents working in conjunction with us scouring the country for great off the plan investment opportunities, to a list of conveyancing professionals to help you settle your purchase. The Hudson finance team work with our suppliers to make your purchase run smoothly.

It costs NOTHING but about a half hour of your time to see if we can save you money so why not give our Hudson Finance Manager Matthew Kerr a call on 1800 804 296 to discuss your loan requirements. 


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05
May 2016

For richer or poorer

For richer or poorer

Written by Hudson Guest Writer Wendy Coslovich


Whether you are married or not, you need to make sure you are set financially for the long haul. This means you need to save for retirement now. Contribute as much as you can afford to super. The average super balance on retirement in 2012 for women was $105,000 but the average balance for men was $197,000. Low paid workers male or female will not have enough to retire comfortably. A large proportion of low paid workers are, not always, but usually women as they tend to spend less time in the workforce, due to factors such as raising children, returning to work on a part-time basis and other caring responsibilities for elderly parents or grandchildren. Less working time means fewer years to accumulate superannuation. Regular money meetings with your spouse or partner not only increases an understanding of each others financial needs, it’s a time to put into place some joint financial goals. It’s not altogether strange to have joint as well as personal financial goals. If an investment strategy is worked on together, as a couple, a marriage or partnership can yield satisfying financial returns. However, it takes team work and it has to be reasonable, but what about when one earns considerably more than the other or when the partnership is such that not all finances are joint due to either a previous marriage or business failure causing financial insecurity? What happens when one person takes time out of the workforce to bring up baby? These needn’t be acrimonious questions, when viewed as investment goals.

A good example of this was a recent case we had. A new Hudson member, after taking 5 years out of the workforce to have children, then returning to part-time work, realised that the amount she was earning was not enough to save or invest let alone pay into her super, or so she thought. She had not contributed anything for those years into her super. Our new Hudson member did not think an adviser would be interested in her meagre portfolio. Her husband was providing the best he could but did not see how his wife’s insufficient super or savings would impact him long-term. He was the bread winner after all and he would take care of the future - right? However, on speaking with an advisor they began to see the seriousness of her financial situation and wanted to correct the course they were on. While he was more than willing to support her into retirement, it was an uncertainty she did not want to live with. They looked at ways she could increase her contributions into her super and invest no matter how small. A tough family budget was the starting point. She learned that her husband could split his super contributions into her super and that she could salary sacrifice into her super. With as little as $1,000, she opened a managed fund and now pays into this on a monthly basis. They both updated their wills to reflect their joint current situation. Her husband has a well paid job and by contributing to her super (on top of the super split at year’s end), gained some tax relief in his annual returns.

The budget this week has seen marked improvements in the way super is treated for low income earners and this is great news. The Government will introduce a Low Income Superannuation Tax Offset (LISTO) from 1 July 2017, to replace the Low Income Superannuation Contribution (LISC). It appears the LISTO will operate the same as the LISC – a $500 offset for contributions tax for low income earners. “The Low Income Superannuation Tax Offset will, in particular, assist around 2 million low income women to build their superannuation savings,” according to the Treasurer. This all means that this is a good time to start navigating a course towards good financial health with your adviser and throw in a quick discussion with our insurance team to look at the insurance held within your super. Low income earners tend to focus on the bigger details and not notice that they are also paying for insurance out of their contributions and often do not realise what that covers them for in the event of becoming unemployed due to serious illness or injury.

Our new member’s finances were not so dire that they couldn’t be resuscitated. Call our advisers today to help you breathe life into your financial condition.


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