Dooley Blog

We all know how much we end up spending on the festive season.

We start with good intentions. We budget. We pay extra off the credit card or put extra aside in the savings account. But, it still happens. January arrives and your jaw drops when you read those lovely letters banks like to send us.

Here’s a few tips on stress-free holiday spending:-

1. December is the peak credit card spending period so try and limit what you use yours for.
2. Use cash if possible.
3. Pay money off your card through your spending period.
4. Check the interest rate on your credit card as on some cards, interest charges start accruing, possibly over 20%, if the balance is not returned to “0” by the due date.
5. Don’t change your spending habits chasing reward points.
6. If you can’t bring your card spending back under control by the due date, consider paying chunks of cash into it in the first few months of the new year.
7. Pay more than the minimum requirement, as paying the minimum will see you paying off Christmas well into the new year and beyond.
8. Enjoy – in moderation, and hope your gifts are just what the recipient was dreaming of.

A recent article in the Sydney Morning Herald discussed a bank’s recent practice of ‘blacklisting’ certain buildings on which they refuse to lend finance. This means that whilst you have a pre-approval to borrow a specific amount, the bank may later not agree to lend you any money if your ‘perfect place’ happens to be on their blacklist. There are several reasons why a property might end up on a bank’s blacklist, which may change from time to time.

This highlights the importance to ensure that you seek legal advice on your Contract before you sign and have the agent exchange the Contracts to ensure that the appropriate conditions are added to the Contract and so that you have time to obtain an unconditional loan approval from your bank to be certain that you will have the money to complete your intended purchase.

If you are worried about missing out on the property, at worst, you should ensure that when the real estate agent exchanges the contract that you have not waived any cooling off period. This will ensure that you have time to confirm with the bank that they will lend you the money you require to purchase the property. If you are purchasing a property at auction, it is important that you are aware that there is no cooling off period therefore, unless you have previously obtained legal advice and negotiated with the Vendor for the Contract to be ‘subject to finance’, you will be bound to purchase the property whether or not the bank lends you the money.

Spending the time upfront could save you tens of thousands of dollars in lost deposits if you fail to complete a purchase because a bank refuses to lend you the money.

If you would like to discuss your proposed purchase, please contact us.