November 2011

Household debt

We hear so much about household debt and the ever increasing debt cycle, but interestingly, there has actually been an increase in the number of households reporting that they are ahead of their home loan repayments and/or paying off their credit card balance regularly each month.

Through the 1990s and early 2000s the proportion of households ahead on their home loan repayments declined steadily, with households’ usual principal repayments falling relative to the home loan value.

This trend was partly due to high turnover in the housing market at that time, which increased the share of borrowers who were in the early stages of paying off their loan, but also the rising interest rates from 2002 to mid 2008 reduced the amount of cash flow available to households to make these additional repayments.

Following the global downturn and associated reduction in interest rates from late 2008 there was a boost in the cash flow available for households to repay debt. With almost half of households reporting that they did not lower their usual repayments following decreases in their interest rates by some 4% (Sept 2008 – Feb 2009) and real rates dropping by around 3%.

Of course rates then went back up (Oct 2009 – Nov 2010) but with the RBA rate reduction on Cup day this year the question is will borrowers use the drop in mortgage payments to reduce their debts? Well we think that’s quite possible.

However, not everyone is in this fortunate situation and this is where La Trobe Financial comes in. We can help kick start your clients to a more affordable repayment future. We will consolidate those expensive credit cards, personal loans or outstanding debts, and as a flexible independent non-bank lender we will continue to offer one of the broadest product suites on the market with the ability to assess loans based on their merits.

Full Doc

80% LVR with no Risk Fees

Flexible credit card treatment

Flexible income treatment with the following all considered:

Up to 100% overtime

Up to 100% bonus

Up to 100% commission

Cash Out is available on all Full Doc Loans (Your clients choose what they want to use their equity on, be it personal, business or investment, the choice remains theirs)

Express Lite Doc

80% LVR with no Risk Fees

No BAS statements required*

Available for borrowers with recent and older defaults**

Cash Out is available on all Express (Lite) Doc loans (Again, your clients choose what they want to use their equity on, be it personal, business or investment, the choice remains theirs).


Best regards

Iain Pepper


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Iain Pepper
Head of Lending

t  +61 3 5177 1767
e  ipepper@latrobefinancial.com.au

Craig
Craig Robertson
National Relationship Manager
0447 599 664
Daryl
Daryl Hill
National Relationship Manager
0408 566 524
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Janelle
Barnes
BDM - QLD/NT
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Hemsworth
BDM - NSW/ACT
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Toby
Owen
BDM - WA
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Michelle
Bannister
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Steve Lawrence
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Cory Bannister
Head of
Credit
0403 361 026
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Credit
Manager
03 5177 1670
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Credit
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03 5177 1652
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Credit
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03 5177 1607
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Jimmy Mc Grath
Underwriter
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Underwriter
03 5177 1798
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David Ladd
Underwriter
03 5177 1770
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Underwriter
03 5177 1718
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Linda Gorski
Asset Retention
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Phil Wilson
Asset Retention
03 5177 1656
 






La Trobe is one of Australia's leading independent specialist mortgage Financiers. Its business includes residential mortgages, commercial mortgages, and investment services operating one of Australia's largest Mortgage Funds under AFSL 222213. It employs over 145 staff and has raised over AUD$10Billion to assist over 100,000 customers since inception in 1952.

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IMPORTANT: This message, together with the La Trobe Financial website (www.latrobefinancial.com.au) and all its contents have been prepared for general information only and should not be taken as legal or financial advice, and as such the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before acting on any information present on this message or the La Trobe website. La Trobe Financial Asset Management Limited ABN: 27 007 332 363 and AFSL No: 222213 is the issuer and manager of the La Trobe Australian Mortgage Fund. It is important for you to read the Product Disclosure Statement for the Fund before you make any investment decision. You can get a copy of the PDS by calling 1800 818 818. You should consider carefully whether or not investing in the Fund is appropriate for you. (1) The rates of return from the Fund are not guaranteed and are determined by future revenue of the Fund, and may achieve lower than expected returns. Investors risk losing some or all of their principal investment. (2) The rating report is available on the La Trobe website or upon request. The rating is only one factor to be taken into account in deciding to invest. (3) Withdrawal rights are subject to liquidity and may be delayed or suspended. (4) Rates (where shown) are indicative and for information purposes only and must be confirmed by your La Trobe loan manager upon formal application. Rates are subject to change. Please refer to http://www.latrobefinancial.com.au for full comparison rate schedule. ^All defaults are considered in responsible loan assessment. All loans are fully assessed to meet responsible lending requirments. All features and interest rates are current as at the date of publication.