Greenleaf Finance

NEW LAW GIVES CONSUMERS ANOTHER REASON TO USE BROKERS

Great news for anyone planning to take out a home loan – new legislation means consumers are even better protected when they use a mortgage broker.

The Best Interests Duty, which took effect on 1 January 2021, legally obliges brokers to act in the best interests of their clients. This new law is on top of the National Consumer Credit Protection Act, which already regulates the conduct of brokers.

Brokers must “prioritise their consumers’ interests” if there’s ever a conflict of interests, according to the legislation.

But while brokers have to follow the Best Interests Duty – banks do not. A broker must give their client the best possible recommendation from all the lenders on that broker’s panel. However, a bank will recommend only its own products, even if there are better alternatives.

Brokers act in your best interests when recommending a home loan, and have a legal obligation to do so. Banks sell you products.

AUSTRALIA’S MORTGAGE MARKET HAS BEEN GETTING SAFER

Banks have raised their lending standards over the past decade or so, by reducing their volume of low-deposit and interest-only loans.

The share of home loans with a loan-to-value ratio (LVR) of 90% or more (i.e. a deposit of 10% or less) fell from 22% in 2009 to 9% in June 2020, according to data from APRA, Australia’s mortgage regulator.

Meanwhile, the share of interest-only loans was 46% in 2015, but averaged only 17% of new lending from mid-2017 to mid-2020.

That doesn’t mean it’s no longer possible to buy a home with a 10% deposit or take out an interest-only loan – it is. There are still lots of options available for that type of borrower.

BIG FALL IN THE NUMBER OF FOR-SALE PROPERTIES

If you’re in the market and you’re struggling to find property, there’s a good reason – the number of homes listed for sale had an unexpectedly large fall in December.

SQM Research has reported there were 272,999 properties listed for sale in Australia in December, which was down 7.9% on the previous month and 5.8% on the previous year.

This shortage of properties has helped drive an increase in prices – which is why some commentators expect listings to significantly increase in January and February, as home owners look to cash in.

If you’re planning to buy in 2021, here are three things to consider given the unusual conditions right now:

1.     Expect to pay a low interest rate for now but budget for future increases

2.     Be prepared to move fast if there’s a shortage of stock in your target area

3.     Consider how Covid-19 might affect inspections and auctions in your area

NEW HOME SALES JUMP 91.8% IN DECEMBER

The federal government’s HomeBuilder grant has led to the largest number of new home sales in two decades, according to new data.

The Housing Industry Association (HIA) has reported that:

· The number of new home sales in December was 91.8% higher than November

· December was the biggest month for new home sales since March 2001

· Sales volumes for 2020 were 32.5% higher than 2019

“This surge in sales can be attributed to HomeBuilder as households finalised contracts to build a new home before the 31 December 2020 deadline to access the $25,000 grant,” according to the HIA economist Angela Lillicrap.

HomeBuilder is continuing until the end of March, but with a reduced grant of $15,000.

An unexpected call to say there’s a problem with your computer should set the alarm bells ringing.

You answer the phone, and the caller says they’re from a well-known company like Telstra, the NBN or Microsoft. They need access to your computer to fix a problem. Sounds normal right? Except you weren’t aware of any issues. No matter, just hand over your credit card details, let the caller access your computer remotely, and all will be sorted.

That’s the scenario behind remote access or ‘technical support’ scams. But far from cleaning up your laptop, what the caller is really interested in is cleaning out your bank accounts.

$5 million lost to remote access scams in 2019

The criminals behind these scams often sound convincing, using tech talk or quoting legit-sounding employee numbers. But they’re a slippery bunch, and they’re after a lot more than a few bucks fleeced from your credit card. If you give the go ahead to access your computer remotely, the crooks can install malware that records every keystroke you make – including bank account passwords. From there, it’s child’s play for the scammers to siphon cash out of your account and channel it into their own.

In 2019, Australians lost $5 million to remote access scams, and over-65s are the most vulnerable. But no one is immune.

Protecting yourself from remote access scams

The thing is, there’s a simple way to know if you’re talking to a scammer. The clue is that big companies don’t call out of the blue asking to tap into your computer. For example, Telstra provides notice in writing about technical faults, Microsoft doesn’t make unsolicited calls to provide tech support and any communication with Microsoft has to be initiated by you.

And don’t be conned if the caller claims to be from the NBN. As a wholesaler, the NBN only rarely deals direct with the public.

Keeping your computer’s firewalls, passwords and antivirus software up to date is important. But when it comes to remote access scams, the best source of protection is you.

Never hand over details of your credit card or bank account to a random caller – even if they say they’re from an organisation you trust. And if a stranger asks to access your computer remotely, hang up fast!

What if I’ve been scammed?

If you’re concerned your computer may have been hacked or you have received any communication from an organisation that meets the above criteria, contact your bank straight away.