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Fri, Aug 8th - 7:50PM

Non-Conforming Home Loans - A Blessing for People with Default History

In the past, lenders considered default history as the most damaging thing for a home loan. They rejected home loan applications of people with defaults in the past. But, today the condition is different. Fortunately, there are some lenders and credit providers who offer home loans to people with default history. Such loans are called non-conforming home loans.

Non-Conforming Home Loans

Non-conforming home loans are the same as regular home loans. But, owing to the extra risk involved, you will most likely have to pay an increased interest rate.

The Criteria to Get a Non-Conforming Home Loans

Non-conforming home loans are only available if you can meet the following criteria:

• You should not be in bankrupt or taking advantage of a part 9 creditor agreement within the Bankruptcy Act. (You can however apply for a non-conforming home loan the day you receive your discharge from such restrictions).

• You need to put together a minimum deposit of 20 per cent (or have 20 per cent equity in the property that you want to refinance). The maximum non-conforming home loan is 80 per cent of the property value. However, any First Home Owner Grant (FHOG) that is available to you will form part of your deposit

• 20 per cent deposit is mandatory even when you have a guarantor. Likewise, it a large salary will not give you relief from the deposit amount.

• You will be required to find money to pay any stamp duty and other costs that outside the loan allocation funds.

• You should have sufficient ongoing income to service the loan repayments. (Usually people on pensions or those who are unemployed cannot obtain a non-conforming home loan).

What Information should be provided to a Non-Conforming Lender?

Lender will look at all the red flags in your credit file. So, if you try to hide something from the lender, you will not improve your ability to get a low rate home loan. In fact, you will simply make the lender more suspicious. It may also lead to your application being declined because you were not transparent enough or fully honest about your circumstances. So, be transparent and open about each and every entry appearing your credit file.

So, next time you venture to out to get a non-conforming home loan, remember to be clear about your financial details. Do keep in mind the other points mentioned in this article. It will ensure stress-free approval.

Quick approval on bad credit mortgage is easy with Singh Finance. If you opt for guarantor home loans, it will be easier. Contact the reputed brokerage firm today and book an appointment.


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Fri, Aug 8th - 6:20AM

Car Finance - How to achieve Success in buying a Car?

An automobile is not just a means of communication. People are passionate about it and their love for the four-wheeled beauty is eternal. If you want to buy a car of your own, here’s some help. The car financing guide will provide you information about the entire process. It will aid you in obtaining a successful finance deal. It includes a list of factors that you should consider before taking a decision. So, let’s start.

Be ready

Financing a car is not like buying a new pair of shoes or a shirt. You will have to be ready with few things.

• Borrowing Capacity

Good things come to those who wait and prepare. So, don’t think you can find your favorite car and the perfect loan package in a day. Before you start looking for your new or used car, you must sit and calculate your budget. Know much you will be able to borrow. Also, ascertain your monthly payments. You can use online calculators for this purpose.

• Documents

A. For PAYG Employed Applicants - Copies of recent 2 pay slips and the Group Certificate for last financial year are required

B. For Self-Employed Applicants - Copies of the last 2 years Tax Returns including full financials

• Deposit

The dealer may ask you to pay a deposit so that he can reserve the car for you. Deposit is ten to twenty per cent of the car loan amount. It is not a small amount. So, you should spend some time in getting together money for it.

What’s available?

Before you start searching for the perfect car loan package, you must have knowledge of the car financing options that are available in the market. There are two main sources of car financing.

1. Car Dealer Finance (i.e. provided by the car dealer)

2. Alternative Car Finance (i.e. provided by banks, credit unions, finance companies, etc.)

After you decide the source of financing, you will have to choose the car financing product. There are a number of car financing options to consider. To make your decision process easier, here is a list:

• Personal Lease

It is an ideal option if you are using the car for personal purpose. The lease term can vary from one to five years. It is available with both fixed and variable interest rate. Its rates are lower than other car finance products. It is possible for you to select the residual value and opt for lower monthly repayment.

• Car Loan

A car loan enables the lender/credit provider to take security over the car that you are buying. It helps them in protecting their investment. To get approved for a car loan, you must purchase your vehicle from a licensed car dealer. You have the benefit of choosing a long term loan (up to seven years) as well as the residual value.

• Personal Loan

These loan packages can be secured or unsecured. If you opt for an unsecured personal loan one, it won’t be secured against the car that you are buying. The interest rates are slightly higher but, you get benefits of flexible loan terms and simpler approval requirements.

• Chattel Mortgage

It is an ideal option if you are using the car for business purpose. The lender will use your car as a security. Sole traders, partnerships, companies, trusts, and ABN holders use this option.

 

The loan term ranges from one to half a decade. It has low interest rates. The monthly payments on the chattel mortgage option are eligible for tax deduction.

So, these are the available options. Once you choose the car finance option, you can apply with a lender or dealer. But, don’t be in a hurry. Take ample time in deciding on the things mentioned in the car finance guide. It will help you in choosing a best finance deal.

Remember that Rome was not built in a day.

Don’t know where, when and how to start seeking your low rate car finance solutions? Singh Finance’s professionally qualified and finance experts will find you the perfect car finance solution package at the right price. Contact us today on 0424 190 908 and make an appointment to have an obligation free assessment.


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Thu, Aug 7th - 6:36AM

Tax Debt Loans – The Solution to your Tax Liability Problem

What is a Tax Liability?

The tax liability is the total amount of debt (money) a taxpayer or entity is legally obligated to pay the government as the result of the occurrence of a taxable event. Different taxable events command different tax liabilities and include, but are limited to:

• The receipt of Annual Income (i.e. money)

• All revenues derived from a business, less all expenses

• The sale of an asset for profit (i.e. real estate, stocks, liens, a patent, accounts receivables, or a claim on debts), or

• An inheritance of money or assets from an estate

How is a Tax Liability Recorded in Financial Statements?

The tax liability is recorded as a short-term liability in financial statements, and takes precedence over all other liabilities.

How are Tax Liabilities Incurred?

Tax liabilities are mostly incurred because; taxpayers (entities) are not setting aside enough cash (money) in the event of the following occurrences:

• Large increase or decrease in earnings

• Accountant errors, bookkeeper errors or tax planning errors

• A change in the circumstances of a business

• Unsound budgeting for tax obligations (i.e. accrued or assessed taxes)

Are you Able to pay your Tax Liability?

Every financial year you may be just like many other taxpayers or entities whereby you, find yourself in a situation, where you have not put aside the necessary cash to pay the tax liability you may owe to the government for any or all of the following taxes:

• PAYG Tax

• Goods and Services Tax

• Business Tax

• Fringe Benefits Tax, or

• Capital Gains Tax

What Options do I have to pay my Tax Liability?

Like many other debt problems, tax liabilities will not go away. Listed below are some options for you to consider and, which may be suitable for you:

• "Low Doc" Tax Debt Loans - when you do not have your financials

• Tax Debt loans when you have all of your financial statements available

• Tax Debt loans when you have credit blemishes

• "Fast Tax Debt" loans when you may have the Australian Taxation Office (ATO) hot on your heels

In addition to the above loans, you may be able to arrange a "Payment Plan" with the ATO. However, the payment terms may or may not be suitable for you, because:

• The ATO will usually require you to pay back the whole debt in 1-2 years and this can make your ATO payment structure plus your ongoing tax liabilities difficult to sustain

• The ATO will usually not re-instigate a payment plan if you have missed any payments, even by one day

Can I claim a Tax Deduction on the Interest Payable on my Tax Liability Loan?

• If you are carrying out business as a Company then, the interest paid on your tax liability loan can be considered as a tax deduction. However, it is advisable that you seek assistance from your accountant

• The interest on your tax liability loan is not allowed as a tax deduction if you are:

• An individual (i.e. non-business)

• Trading as a sole trader, or

• In a partnership

Can anyone help me pay my Tax Liability?

Yes, if you are unable to pay any of your tax liabilities, do not take tension. Simply contacta reputed brokerage firm. It will arrange a tax liability loan and ensure that the following actions are not taken against you by the Australian Taxation Office:

• A Court Judgment

• Outsource the debt owing to a debt collection agency, or

• Even force you into Bankruptcy

So, this is how you can obtain tax debt loans and pay off your tax liability.

Are you worried about paying off your tax liability? Contact Singh Finance and put all your worries to rest with tax debt loans. You can even obtain low rate commercial loans with the help of finance experts.


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Tue, Jul 29th - 4:26AM

The Complete Guidebook for Understanding Property Valuation

Property Valuation – The Meaning

A property valuation is often conducted by a qualified and certified valuer on the request of a lender/credit provider who is looking to fund the purchase of a property. The valuation can also be requested by you (if required).

Property Valuations – The Need

It is an essential part of the home loan application process and is usually performed by when lenders are in the process of financing a property. The lender/credit provider will usually use their own nominated panel or preferred licensed property valuers.

Property valuation is requested for number of reasons, such as:

• To assist in the calculation of the Loan-to-Value Ratio (LVR)

• Develop an opinion of the market value of the property

• Assess the value of land, buildings, improvements and other factors that influence the current and past value of your property (i.e. the process involves both external and internal inspection of the property)

What Information is available in Property Valuation Reports?

Property valuation reports will include the following relevant property information details:

• Executive Summary - which is a summary of the report itself showing who ordered the report and who the owner of the property is to be

• Land Details – such as dimensions and area

• Title Particulars – shows the Title volume and folio numbers and any other encumbrances registered on Title

• Topography – a description of the land and the area

• Services – what infrastructure is available e.g. water, electricity, sewerage

• Town Planning - the Zoning of the property and if the buildings conform to that zoning

• Planning Constraints – whether the property has any Council planning constraints

• Environmental – if any environmental issues are in evidence

• Location – describes where the property is in relation to CBD’s and other suburbs

• Improvements, which include:

- Dwelling Description – a brief statement of the dwelling

- Construction – describes the materials used e.g. brick and tile

- Accommodation – the number of rooms and the type of rooms within the building

- PC Items – covers the kitchen, bathrooms, laundry

- Fixtures& Features –describes such items as the air conditioning, ceiling fans and floor type, etc.

- Other Improvements – will show a swimming pool (if installed), and fencing

- Building Areas – shown in square meters the living, outdoor and garage areas

- Condition

• Photographs of Improvements – photos of the building in and outside

• Comparable Sales – shows the recent sale of other properties in the same area

• Sales Evidence - lists the address, sale price and date of sale

• Risk Analysis – shows the property risk and marker risk ratings on a scale of 1-5 with 1= low risk and 5=high risk

• Comments – Valuers overall assessment of the property

• Valuation Approach

Remember that several factors constitute the property valuation report. If you keep in mind the factors mentioned in this guidebook, it will enable you in choosing the right property.

Are you considering buying a property? If you are looking for finance, Singh Finance will help you in getting the best property finance package. The firm’s home loan specialists will create a budget for you and find you the most affordable finance solution. Enquire online now.


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Mon, Jul 28th - 3:52AM

Capital Gains Tax FAQs - Find Quick Answer to your Questions here

Capital Gains Tax (CGT) was introduced in Australia on 20th September 1985. The tax applies only to assets acquired on or after that date. Gains (or losses) on earlier assets called pre-CGT assets are ignored.

CGT was introduced to reduce the inconsistency between the taxing of wealth and the taxing of income. The CGT system works by including the assessable gain on the disposal of a CGT asset in the assessable income of the entity disposing of it.

What is a Capital Gains Tax (CGT)?

Put simply, Capital Gains Tax is not a separate tax; it is part of your income tax liability. CGT is the tax you pay on the difference between the amount you sell an asset for and the amount you paid for it.

Capital Gains Tax in the context of the Australian taxation system applies to the capital gain made on the disposal of an asset, except for specific exemptions (e.g. the most significant exemption is the family home).

What is a Capital Gain?

A capital gain will occur when a capital asset is sold at a higher price than it cost you. For example:

• When you sell an asset for more than what you paid for, this is referred to as a "capital gain" , and

• If you sell an asset for less than what you paid for, this is referred to as a "capital loss"

Whether you make a capital gain or not depends on the purchase price of an asset compared to its selling price.

A capital gain usually has a different meaning for the tax department, the economists and the accountant.

Is a Capital Gain Treated as Taxable Income?

Yes, Capital Gains Tax operates by having net capital gains treated as taxable income in the tax year an asset is sold or otherwise disposed of.

It is important to note, that a Net loss in a tax year cannot be offset against any income. But, the net loss can be carried forward to be deducted against any capital gains in future years.

What is a Capital Gain Discount?

If the asset is held for at 1 year and you have determined the total capital gain, the CGT discount can then be applied. The total gain on the assessable income is first discounted by:

• 50% for individuals taxpayers, or

• 33.3% for self-managed superannuation funds

Companies and other trusts are not entitled to a CGT discount.

What Assets are Liable for Capital Gains Tax?

All assets are subject to the CGT rules unless they are specifically excluded. Capital gains and losses in a given tax year are totalled into three separate asset categories according to the class of the asset. The three separate asset categories are:

Collectables: This category includes assets acquired for above $500.00 and used for personal enjoyment, such as:

• Boats

• Furniture

• Electrical equipment, etc.

Personal Use Assets: This category includes assets acquired for above $10,000 used for personal use, such as:

• Paintings

• Art

• Jewellery

• Postage Stamps

• Antiques

• Coins, etc.

All Other Assets: This category includes assets that are not categorised as collectables or personal assets, such as:

• Land

• Shares in a company

• Rights and Options

• Leases

• Units in a Unit Trust

• Goodwill

• Licences

• Convertible notes

• Your home or unit

• Foreign Currency

• Contractual rights

• Any major capital improvement made to certain land or pre-CGT asset

The existence of separate categories for collectables and personal use assets works to prevent losses from them being offset against other gains, such as from investments. This works to prevent taxpayers subsidising hobbies from their investment earnings.

What Assets are exempted from Capital Gains Tax (CGT)?

A Capital Gains Tax exemption applies to:

• An asset owned outright

• A partial interest in an asset, and

• To both tangible and intangible assets

The current Capital Gains Tax (CGT) exemptions are:

• Any asset acquired before 20th September 1985, known as a pre-CGT asset

• The house, unit, etc. which is the taxpayers main residence and up to 2 hectares of adjacent land used for domestic purposes

• Collectables acquired for up to $500.00 used for personal enjoyment

• Personal use assets acquired for up to $10,000 used for personal use

• Capital loss made from a personal use asset (i.e. any capital loss you make from a personal asset is disregarded)

• Car and other small motor vehicles, such as, motorcycles (small being a carrying capacity less than 1 tonne and less than 9 passengers)

• Compensation for an occupational injury, or for personal injury or illness of oneself or a relative

• Life insurance policies surrendered or sold by the original holder

• Winnings or losses from gambling (which are free of income tax too)

• Bonds and Notes sold at a discount (gains and losses from these come under ordinary income tax)

• Medals and decorations for bravery and valour, provided they are acquired for no cost

• Shares in a pooled development fund

• Payments under particular designated government schemes (e.g. various industry restructuring schemes)

What is a CGT Event?

A taxpayer can only make a capital gain or a capital loss if a CGT Event happens. The CGT events include:

CGT Event A1 - The disposal of a CGT asset, which covers a change of ownership (e.g. by sale or giving away) of assets such as:

• Shares

• Units in a Unit Trust

• Debt Securities

• Land and Buildings

• Works of Art, etc.

CGT Event C2 - The cancellation, surrender or similar endings of a CGT asset, which would cover:

• The redemption of units in a Unit Trust (where the units are extinguished)

• The expiry of an unexercised option, or

• The redemption and cancellation of a debenture

There are approximately 50 different CGT events and most individuals will never experience many of these events.

What happens when an Asset is owned by more than one person?

Many assets purchased can be held in the following ownership types:

Joint Tenants - When an asset is owned under a "joint tenancy" arrangement. For CGT purposes, the joint tenants are treated as tenants in common (i.e. they have equal shares in the asset). Therefore, each party has an equal share of:

• Any Capital Gain from a CGT event, or

• Any Capital Loss from a CGT event.

For example, a couple that owns a rental property as joint tenants will split the capital gain or capital loss equally when they sell the property.

Partnerships - When an asset is owned by “partners” then the partnership itself does not own the assets. Instead, each partner owns a proportion of each CGT asset. The partners use their proportion to work out their capital gain or capital loss from a CGT event affecting any asset.

Tenants in Common - Individuals who own an asset as "tenants in common" may hold unequal interests in the asset. Each owner makes a capital gain or capital loss from a CGT event in line with their interest.

For example, a couple can own a rental property as tenants in common with:

• One person having a 20% legal interest and

• The other person having 80% legal interest.

When they decide to sell a rental property (or any other CGT event occurs), they will split the resultant capital gain or capital loss between them according to their legal interest.

Why take help of a Finance Broker?

Every financial decision requires time and expertise. It is because even a small mistake can harm you terribly. So, it is wise to seek expert advice from finance brokers. Contact a professional broker who has a thorough knowledge of Capital Gains Tax (CGT). He/she will be able to guide you through your options in determining what assets can be subject to Capital Gains Tax (CGT).

So, next time you have to pay capital gains tax, do not worry. Use this informative guide and employ the services of a finance broker to pay-off your tax liabilities quickly.

Singh Finance provides complete financial solutions to Australians. The firm’s property finance brokers will not only provide you with updated information on Capital Gains Tax but also offer low rate loans for business and home. Contact the firm today.


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