Weekly Wrap - Fri 12th June

What another massive week it's been, with lots happening as always. We’re going to take you through a couple of items that are trending and a few areas of interest for our clients. 

We'll further discuss the HomeBuilders Grant that we touched on last week, and we'll unpack that further with some updates. Talking about what's happening with the banks, whether that be around timelines and approvals or the discharge process. There are a couple of things that are definitely dragging the process there a little bit. 

We’ll also be discussing some stats around what's happening with deferrals of homeowner repayments that have come out from the RBA and updates on the stimulus. A little bit more info also to talk about ethical banking, a really hot topic that we are seeing come from a few clients at the moment. 

Firstly, thank you everyone for touching base and getting in contact last week. We had a massive amount of referrals and inquiry, many new enquiries came through about that HomeBuilders Grant and what's available, but we’re still waiting for the Federal Government to be able to give us an idea of how it’s all going to work.

A couple of those challenges are, and probably one of the biggest questions is, can we use it as deposit? A great question, and a really obvious one, but we just don't know. We're not totally clear yet from the Federal Government about when it's going to be funded or how it's going to be funded. If it is being used as a deposit, that's obviously going to play a big role in the application process and we can't really move forward on that yet. 

If you're still thinking about it, get in touch, and be very mindful of what’s out there, we've seen a lot of land contracts come through this week.

There is a lot of excitement about what's happening, but we need to understand that application process a little bit better. If that $25,000 is being relied on as part of your application, it's going to have a huge impact which way that goes. So what was hopefully released on the fourth, is now the 12th, but maybe another week or so, we're going to get some feedback on that and we'll be sure to reach out to you as soon as we do.

Now, talking about the banks and their timelines for approval. On the back of post-COVID, as we come out of restrictions, the application process with a bank had gone from maybe two to four days, to maybe seven to eight for the majority of the banks.

Two of the major banks right now are at twenty plus business days just for first touch on a file. If we're signing contracts here in Queensland in fourteen days, maybe twenty one, there's every chance that that application won't even be picked up before that finance clause is up. 

So we’re really encouraging you to have a conversation, whether it's reaching out to us or a broker or a bank, asking those questions, understanding the timelines, what are their workflows at the moment, and when do we expect that to be picked up? Because signing a contract on a Sunday and meeting with your bank on a Thursday and thinking it will be done within fourteen days - at the moment there's very few banks that can probably do that.

That's very much part of our process when it comes to working in your best interest. Understanding what those timelines are for different banks at the moment? Is it achievable? 

Next let’s talk about the discharge process. If you've got the timeframes around getting your approval for a potential purchase, there's also timeframes around discharging existing property or mortgages, or potentially you're refinancing and releasing some equity, that's being relied on to seal on the new purchase as well. Delays in what's called ‘the discharge process’ have also blown out significantly. Again, they were traditionally between fourteen to twenty one days, but they can now be four to six weeks.

There has been a lot of discussion around that. Every bank has a different process, a different form, a different time frame, a different department and they are calling for that process to be streamlined and more standardised. There really is no reason why it has to be this hard at the moment, but please also bear that in mind, on the settlement side of things, that if you are relying on a discharge of an existing property or refinance that this can also create some delays.

So whilst we can get you in the door very quickly with a lender to get you approved, if we need equity or refinance involved, it definitely moves the goalpost. 

Another thing we're going to talk about is that there are some interesting stats that have come out from the RBA this week. A hot topic and good point of interest is the deferral process. According to their stats, one in fourteen mortgages has been deferred at this point over the last six to eight weeks.  That’s over 429,000 mortgages, and doesn't include personal lines and credit cards. So definitely giving some breathing space across the household, but interestingly a lot of those still being paid.

So even though we have that large number of people who have to forfeit their mortgages, it was really great to hear that a lot of people are actually still are making some form of payment, whether that's a small amount each week, or the interest only component. This obviously puts a customer or a household in a better position when we do need to start making those repayments again and those deferrals finish. 

It’s great to hear so many people are actually being really proactive and saying, "Hey, I don't need to make my payment right now, but I can afford to do it, so I'll continue to make some form of commitment." That's a great thing to do.

Whether you’re a client of ours or not, we’re always happy to talk through that process.

With the stimulus, we're starting to see some milestones as we've moved through these. So in relation to that first period, or the first period of those deferrals for the six months, when that comes up, we're going to see some new and updated information come out from the Government in July. We're going to see some of these deferrals come off the six months.

We’ve had some really interesting feedback from a few clients this week regarding ethical banks. It's always interesting when we speak with a client around research or a discussion piece when we're looking at different banks as to what's actually important to them. For some clients that might be that they need access to a branch, or there's a specific bank that they really like for a certain reason. And we're getting a really large number of clients mentioning that it's actually important to them to go to what's called an ethical bank. Generally the way we talk about it is, that it’s a bank that doesn't invest heavily in fossil fuels or has a lower carbon footprint, or is conscious of that.

Your major banks are probably ones who do invest in that space a little bit more, but there are some great small banks who are really competitive and really proud to put their hand up and say, "Hey, we are conscious of our carbon footprint on the environment, we don't invest in fossil fuels, and we want clients who have those same values or that's important to them." If that is something that's important to you, definitely let us know. We have a list of the good guys and the bad guys in that space, and we'd be more than happy to accommodate that.

Hopefully that's given you a little bit of an insight of what's happening, a very topical week no doubt with a lot of inquiries in a couple of those areas. We encourage yourself personally, as well as your friends, family, and anyone going through the exercise and want to chat or just discuss and understand a little bit more about what it all means, to please reach out to us, we're here and we’d love to chat!

It's been a big week and we look forward to talking with you all next week.