DON’T BE FOOLED!

Reception • Mar 31, 2021

If you are like 30% of the Australian population, you likely already have a Buy Now, Pay Later (BNPL) account – or at the very least, you’ve considered getting one. (And if you are under 30, the likelihood is much higher.) We are talking about the likes of AfterPay, Zip, Humm, and the soon arriving ‘Pay in 4’ offering from PayPal.


Often compared to layby, they are not the same – and there are some significant differences.


With layby, you select your purchase and pay off the amount (without interest or fees) while the store looks after it until paid in full. You then get to experience that sweet moment when you pick up you goods, knowing there is nothing more to pay. Bonus! However, with BNPL, there is no waiting. You get the immediate thrill of the purchase from the beginning – with the sour aftertaste of ongoing payments. The repayments are still interest free – but not fee free.


In fact BNPL providers in the 2018-2019 period raked in over $40 million dollars in late-payment fees* alone. Add to this monthly account fees, payment processing fees, additional payment fees…. In some cases, the list goes on (and on and on), negating any “no interest” savings.

What does all this have to do with applying for a mortgage?


Regular and ongoing BNPL spending is considered an indicator that the spender is living above their means – a big red flag to a financial institution looking to lend.

What can you do?


If you don’t already have a BNPL account – keep it that way. It might seem attractive and a neat way to manage your expenses, but there are hidden catches that would be best avoid.


If you do have a BNPL account here are some tips:


  • Pay it off with your own money, don’t use a credit card. (Or you may end up paying interest on top of fees!)
  • Plan for your BNPL payments so they are always paid on-time to avoid any additional fees.
  • Talk to us about how to increase your positioning.


We love to help people at whatever stage they’re in to better their financial future and obtain their goals. Contact us today to see how we can help you. Email info@futurefinancegroup.com.au or call 8657 8664.


*Since the introduction of the Voluntary Code of Practice on 1st March this year, there has been the introduction of late fee caps and processes whereby BNPL providers are to notify their customers of upcoming payments. This is being implemented by those who have agreed to abide by the Code.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply. © 2021

The Power of Pre-Approval: Your Key to Home Buying Success

05 Oct, 2023
The Power of Pre-Approval: Your Key to Home Buying Success

Navigating the World of Mortgages: What borrowing capability do you have?

01 Aug, 2023
Navigating the World of Mortgages: What borrowing capability do you have? Deciding to buy a house is an exciting milestone, and we're here to accompany you through the intricate world of mortgages. With the changes to interest rates that have happened over the last twelve months, it's essential that we are prepared and approach borrowing with a healthy attitude, as your choices now will have long-lasting implications, so let's ensure you're well-prepared for this homeowner journey. What should I consider when considering my borrowing limits? First, let's figure out how much you can borrow without sacrificing your peace of mind and daily joys. The key here is to measure your income against your expenses, including the potential mortgage repayments. A general rule of thumb: try to keep your mortgage repayments to no more than 35% of your gross monthly income. When it comes to borrowing generally, the higher your deposit and the higher your income, the more they should be willing to lend. The good news is we have more flexibility as mortgage brokers than the big banks, so we can look at your circumstances closer. Now, let's discuss some essential factors to consider when figuring out your borrowing limits. How much debt can you handle? Think about your lifestyle and what you're willing to give up versus what's non-negotiable. Be realistic about your dream home. Start with something affordable and gradually work your way up as your earnings grow and your equity increases. Think about the future. Are you planning to start a family, change jobs, or experience significant life changes? Factor those possibilities into your calculations. Keep an eye on interest rates and consider how further rises might affect your ability to make repayments. Reminder; A reminder that when purchasing a property, you will also need to factor in further expenses, such as, pay stamp duty, pest & building inspections, conveyancer fees, application fees, council rates, possible strata or body corporate costs, and utility bills to factor in. In Summary We'll help you evaluate your financial situation, research and compare over thirty lenders and loan options, and gather the necessary documentation to help you whether you are purchasing your first home or refinancing. What should I do next? Our dedicated team is committed to nurturing your financial well-being and helping you achieve a stronger and more secure future. Call our office on (03) 8657 8664 to organise a time to chat, and we also invite you to take advantage of our free resources by heading to our website. https://www.futurefinancegroup.com.au/

Refinancing: What Are Your Options As A Homeowner?

By Bree Jones • 19 Jun, 2023
At Future Finance Group, we understand that financial hardship has become a pressing concern for many homeowners across the country, including Melbourne. We want to help you explore the benefits of refinancing your mortgage. By assessing the right time to refinance and understanding the steps involved, we can guide you to potentially save money, access improved loan terms, and secure a more favourable financial future. What are the Benefits of Refinancing? During these challenging times, refinancing your mortgage can bring meaningful advantages. Firstly, it may allow you to take advantage of lower interest rates, reducing your monthly mortgage payments and offering much-needed relief. Additionally, refinancing allows switching from a variable-rate to a fixed-rate mortgage, ensuring stability and protection against future rate increases. By consolidating high-interest debts, you can streamline your finances and gain more control over your monthly obligations. Also, refinancing can unlock equity in your home, providing funds for essential expenses or other financial goals. Assessing the Right Time to Refinance Working out when to refinance can be challenging, mainly because we do not know what the future will bring. We are here to look at your personalised options and work with you to ensure your financial security. We can consider many factors, such as your credit score, home equity, and employment stability, to give you informed options. Steps Involved in Refinancing and Potential Cost Savings : We are here from the beginning to the end and strive to simplify the refinancing process for you. We'll help you evaluate your financial situation, research and compare over thirty lenders and loan options, and gather the necessary documentation. Our ultimate goal is to help you secure better terms, rates, and long-term cost savings to ease the pressure on you and your family. In Summary In these challenging times, exploring refinancing options can provide much-needed relief and open up financial opportunities for you as a homeowner. What should I do next? Our dedicated team is committed to nurturing your financial well-being and helping you achieve a stronger and more secure future. Call our office on (03) 8657 8664 to organise a time to chat, and we also invite you to take advantage of our free resources by heading to our website. https://www.futurefinancegroup.com.au/
MORE POST
Share by: