Archive: December 10, 2021

Uncategorized

Things to consider when purchasing used equipment

Dec 10, 2021 by admin 0 Comments

With the increasing shortage of new vehicles and equipment, the second-hand market for many items has inflated by around 25% over the past year. This boom is being compounded by high commodity prices and long wait times for new equipment deliveries.

Keeping this in mind, buyers should prepare for their secondhand purchases with a thorough checklist, and effective due diligence process, and the best equipment financing options. Let’s discuss these important steps.

1. Second-hand asset checklist

It is really challenging to find the right used machinery with satisfactory working conditions particularly if the buyer isn’t familiar with conducting the proper inspections.

Here are some important points you should consider including in your checklist before starting your second-hand equipment search

Start the equipment inspection with a condition report, interstate registration transfer, and insurance.

Check the equipment including the tyres, lower body, buckets, and blades.

Ask how the machine was used, where, and in what type of working environment.

Identify any components that appear worn out, or close to being worn out.

Check the hours on the meter for an accurate gauge of how much usage the equipment has had.

Pull the machinery forward a few meters to check it tracks straight.

Get an oil sample and check for metal contamination through oil analysis.

These tips can be used to conduct a basic inspection on any used equipment you buy, however, it is best to have a qualified technician perform the inspection on your behalf if possible.

2. Due diligence

It’s important to remember that the risk of problems with buying second-hand equipment is significantly higher than with buying new.

Here are a few key questions to be addressed through the due diligence process:

How long is the equipment likely to last? 

Is the equipment an exact match for your needs?

Is the seller reputable?

Are there any additional removal and shipping charges?

When conducting private sales, a little diligence can go a long way. There will always be some risk involved with purchasing second-hand, and these risks grow with the list of former owners. However, being aware of these risks is paramount to effective planning and mitigation.

3. The benefits of equipment financing

Business owners have a number of equipment finance options available which allow them to pay off second-hand assets over time, as opposed to full payment at the time of purchase:

Finance lease 

Commercial hire-purchase

Specific security agreement (formerly a chattel mortgage)

These are some of the finance options available, but finding a suitable finance option doesn’t have to be complicated. A broker can help simplify the process and find you the best finance option and lender, depending on the equipment you are buying and what it’s being used for.

Uncategorized

Should I refinance my home loan?

Dec 10, 2021 by admin 0 Comments

Refinancing simply means securing a new home loan that repays and replaces your existing one.

You may consider refinancing your mortgage to lock in a lower interest rate or take advantage of better loan terms or features such as a redraw facility or flexible rates. You may want to access home equity to invest in properties, shares, or a managed fund. Or you may be looking to consolidate debt into a single payment.

Refinancing can be a good option for many homeowners, But remember, it’s not right for everyone. Here are some reasons you may be keen to refinance and what to consider.

I WANT TO PAY LESS INTEREST

This is the most common reason one chooses to refinance a home loan. And if you’ve had your mortgage for several years, your current lender has probably introduced more competitive products since. You may have found a better deal with another lender.

But while saving money can be an excellent reason to refinance, it’s crucial that you consider more than the interest rate before switching loans. You should also dig down the fees you’ll need to pay for exiting your existing mortgage and signing up for a new one.

A professional mortgage broker like Lending Partners can help you understand the pros and cons of refinancing your loan. They review your current loan structure, income, assets, and financial goals and map them internally. Then they look at other loans from their associated lenders that might offer you a more competitive rate. Once a broker has found suitable products, they’ll also look at the exit and application fees to calculate your total cost saving. Sometimes, you’ll only save a couple of hundred dollars a year, and refinancing might not be worth your while. Other times, your broker may be able to save you around $1,500 a year.

Remember, Sometimes, a mortgage broker can also negotiate a better interest rate with your current lender, without you needing to refinance.

I WANT TO CHANGE LOANS

Refinancing your loan with a new lender may mean you need to pay Lender’s Mortgage Insurance (LMI). In this case, refinancing might not be a good move for you. But working with a mortgage broker has its advantages over going straight to an institutional lending bank. A broker will generally have access to a panel of around 20 lenders and can likely negotiate a better deal for you.

A mortgage broker can also help you understand any hidden loan costs and the different loan features that might save you money or help you achieve other financial goals.

I WANT TO CONSOLIDATE DEBT

Refinancing can be a good option if your credit cards or personal loan interest rates are much higher than your home loan rate. Debt consolidation may lower your monthly repayments, save you interest in the long-term and reduce your financial admin burden.

If you do decide to go down this route, be mindful of not extending the life of your personal loan or credit card to the term of your mortgage.

If you want to refinance to consolidate debt, Team Lening Partner can guide you through every step of this process, providing expert advice and answering all your questions along the way.