Why would you finance through Tidswell rather than banks? What advantages can we provide you with? Watch our video to learn more about what Tidswell can do for you.

Hi, I’m Max Bratton, Mortgage Manager of the Tidswell private mortgage fund. Welcome to our latest Everyday Loan video. Today I want to share one of our recent ‘Consolidation/Bridging’ loans.

This loan ‘consolidated’ the borrower’s financial position and ‘bridged’ the purchase of a $1.2 million home. This is Charlie’s story.

Charlie is a registered builder, in a good financial position. He owns a house at Pooraka, a block of land in Prospect and a commercial/residential property in Klemzig. However, Charlie did not pay attention to his bookwork and didn’t have his financial statements up to date. He also had minor credit card default.

Charlie signed a contract to purchase his dream home in North Adelaide in January 2014. The purchase price was $1.2 million and he paid a deposit of $80,000, thinking he would have no problem with bank finance. But this was not the case. So Charlie could settle his North Adelaide property, he was referred to Tidswell by his finance broker.

Tidswell structures a Consolidation/Bridging loan of $1.65 million, secured by a first mortgage over the Pooraka house, block of land, the commercial property at Klemzig, and the new North Adelaide home. Charlie was able to settle on the North Adelaide home in April 2014.

The loan was approved on the basis that Charlie was to sell down the Pooraka house and the property at Prospect. At the same time, his finance broker was to work on a refinance of the North Adelaide home, with the objective of getting the interest rate down to a sustainable ‘bank’ rate.

Charlie sold both the block of land in Prospect, and house in Pooraka, and reduced his debt with Tidswell to $1.15 million in July 2014.

Charlie then maintained this monthly interest payments to Tidswell and established a clean repayment history for 6 months. This allowed his finance broker to refinance the house at North Adelaide. Charlie’s loan with Tidswell was reduced by $875,000, to $275,000 in March 2015.

Coming to Tidswell allowed Charlie to settle the North Adelaide house, and avoid losing his $80,000 deposit, as well as any non-settling penalties. His broker is now working on refinancing the residual Tidswell debt.

If you would like to know more about consolidation or bridging loans, or you have a deal you’d like to run by Max Bratton, contact us today.

In our latest eNewsletter our Mortgage Manager, Max Bratton, reviews how the 2015 market trends are affecting construction loans in 2016.

You may have found it harder to get investment construction loan from the banks as APRA has tightened the regulations for investment lending. One outcome of this is a general slowdown by the banks.

As Tidswell operates differently from other financial institutions, we have been able to fund construction loans as normal.

The video describes our most successful loan in 2015, to give you an idea of the loans we do. This $6 million loan was to build 32 apartments in Lightsview. The construction is approximately six weeks ahead of schedule, with completion due in April 2016.

Why might a Tidswell loan work well for you?

• Each loan is assessed on its individual merits and, whilst we look at the borrowers’ financial position, the viability of each project is the key
• Loans are approved by the Tidswell Board based on Max’s recommendation and, as Max has an excellent relationship with the Board, if he supports the deal, the loan generally gets approved
• As we are a medium sized company, we can provide a quick turnaround as there is no ‘head office’ that the loan has to be sent to
• Max can provide conditional approval almost immediately
• We have the flexibility to respond quickly to any problems and work with the borrower to resolve them

If your loan is not supported by the banks, and existing loan that can no longer be financed, or you have a deal you’d like to discuss, contact us today.

The Australian Government has a dilemma with balancing their income and expenses. This is because their income is not sufficient to cover all expenses on an annual basis. Unfortunately this has evolved into a tax debate rather than a debate about the real issues.

Many people have the same issues because they are not familiar with their personal income and expenses, as well as the relationship between the two. The key to being more aware of your personal finances is effective budgeting. To understand how budgeting could influence your money management, ask yourself these questions:

Is it easier to save more or to spend less?

Many people spend more than they earn without knowing it. This has important long term financial implications that need to be considered. You see, it’s easy for spending to get out of control when we lose track of where our money is going.

It is useful to note that while you could focus on increasing your savings, you may find it more effective to reduce your spending in different areas of your life.

How can you take control of your finances?

You will be surprised by what you can achieve by taking control of your finances. To begin with, work out where your money is going for each pay period. Start by keeping track of everything you spend and what you spend it on. Understand which expenses are necessary, and which are discretionary. Mortgage repayments, essential services, and food definitely go in the ‘must spend’ group. Some expenses will be ‘optional but important’, and others will fit into the ‘nonessential’ category. We have developed a Budget Planner to help you to differentiate these categories and to make you more aware of your financial position. 

Do you really need it?

After a period of time you’ll have a better idea of where your money is going. You can then ask the following questions to determine how each decision will affect your financial position:

• Do I need to spend this much?
• Am I getting the best value for my money?
• Is this expense important enough to justify its price compared to my income?
• Would delaying this expense allow me to save more?
• If I over-spend, what can I do to prevent it from happening again?

It’s worth remembering that every year we spend billions of dollars on food we don’t eat, clothes we never wear and services we don’t use. For many people, gaining control doesn’t mean ‘going without’. It means being more intentional and deliberate about spending and having a surplus for saving and investing.

How does debt affect you?

Debt is a common term, but how you use it makes a big difference to your financial position. There is good debt and bad debt. While good debt builds wealth, improves productivity, and has tax deductible interest, bad debt builds an unsustainable lifestyle and is not tax deductible. In our next video, we will cover how good debt and bad debt works, and how debt management can improve your financial situation.

To learn more about your personal situation, use our budget planner. It will help you to reconcile your income and expenses, and answer two key questions about your money management. These are: Is there a surplus or a deficit? And; how much do I save or invest?

If you need further assistance in preparing a personal budget, contact Tidswell Financial on (08) 8223 1676 and speak with one of our Financial Advisers. We can give you a comprehensive review of your budget and we can help you adopt a goal-oriented approach to your money management.

Have you ever wondered how do you measure happiness? Happiness is subjective, after all, and what brings joy to one person may barely register for another.

Is your happiness determined by:

• The amount of time you spend with family and friends?
• How safe and secure you feel?
• Your ability to afford a comfortable lifestyle?; or
• The experiences you have?

While we’ve all heard the saying “money cannot buy happiness”, Michael Norton, in his 2011 TED Talk argued that “if you think money can’t buy happiness you’re not spending it right.”

The ability to afford food, shelter, healthcare, etc. definitely impacts on how happy we feel. When you have enough money to afford these necessities however, the difference in our financial wellbeing is more accurately attributed to the enjoyment that money affords us, rather than the amount of money we have.

Our financial wellbeing is often affected by:

• how satisfied we are with our standard of living;
• how wisely we spend our money;
• our financial security and how much day to day stress money causes us; and
• the experiences we buy with the money we have

How much money we have and how much money we make is often seen as the most important factor in money management. While this may be important, studies have shown that how you use your money is much more important and has a far greater impact on our financial wellbeing.

A team of Harvard researchers found that: “spending money on oneself does not boost wellbeing. However spending money on others does – and it appears to be as important to people’s happiness as the total amount of money they make”.^REF

In fact, engaging in ‘retail therapy’ to cheer us up may even lead us to spend more money on ourselves than we would otherwise. “Even if you feel better immediately after your purchase, studies show that our satisfaction with material good decreases over time”.^REF

Buying experiences such as going out for dinner or taking a holiday can increase our own financial wellbeing and the wellbeing of others. You also get the benefit of looking forward to the event, the actual experience and the memories thereafter. Purchasing material items can lose their novelty quickly, but we can relive memories indefinitely.

So what are some of the things that you can do to help improve your own financial wellbeing?

1. Establishing personal and financial goals and knowing how you can achieve them.
2. Understanding your own budget and how you are spending your money.
3. Having in place strategies that will help lessen your worry about money.

In next month’s eNewsletter we will be discussing the topic of budgeting and will include our own Budget Planner. You can use our planner to help track your income and expenses, and understand how you are using your money.

If you are ready to boost your financial wellbeing, contact Tidswell Financial on (08) 8223 1676 and speak with one of our Financial Advisers.