Guest Podcast 3: Dollar And Making Sense – Good Debt Vs Bad Debt

Guest Podcast 3: Dollar And Making Sense – Good Debt Vs Bad Debt

Join us in this enlightening episode of “Dollars and Making Sense” as host Ray Trevon sits down with Victor Lagos from Lagos Financial. Victor, a seasoned mortgage broker with extensive experience in residential and commercial property finance, shares his insights on the complexities of good debt vs bad debt.

From understanding the benefits of responsible borrowing to the pitfalls of credit cards and buy now, pay later schemes, Victor provides valuable advice for managing finances wisely. He emphasizes the importance of financial education and delayed gratification, offering practical tips for avoiding common debt traps.

Whether you’re a seasoned investor or just starting your financial journey, this episode is packed with essential information to help you make informed decisions about your money. Don’t miss this opportunity to learn from one of the best in the industry.

0:00 [Music] 0:10 hi and welcome to Dollars and making 0:11 sense a weekly show about Finance money 0:13 and investing I'm your host Ray Trevon 0:15 from OTG Capital we broadcast locally on 0:19 radio Northern beaches and around 0:20 Australia on the community radio network 0:23 I'm really really pleased to Welcome to 0:25 the microphone this week for the very 0:26 first time I have Victor Lagos from 0:30 Lagos financially Financial did I 0:32 pronounce that correct Victor uh it it 0:34 was close it's Victor Lagos Lagos losos 0:37 I I should be I should be innocent of 0:40 this because I come from Italian 0:41 background so I should have checked 0:43 before we actually came on a I apologize 0:45 losos okay now Victor comes uh to us 0:49 with a background as a mortgage broker 0:51 he's the holder of an Australian credit 0:53 license and like we always do ladies and 0:55 gents on dollars making sense I make 0:57 sure that people that come on to the 0:58 show are licensed actually talk about 1:00 what they talk about uh we don't like 1:03 fin fluences and and the like that you 1:06 know they read money smart and all of a 1:07 sudden they're an overnight expert but 1:09 look Victor's been doing this since age 1:12 19 my word it's nice to know that you 1:14 started young uh Victor in that regard 1:16 and Victor's expertise lies within 1:18 residential and commercial property 1:20 Finance now today Victor I've asked you 1:22 on the show and I think one of the 1:25 things that really I I'd like talking to 1:27 people about is debt um I invest in debt 1:31 but we're not talk here to talk about me 1:33 I like to talk to people about debt 1:34 because my kids sometimes come to me and 1:36 they don't understand how money can cost 1:38 different amounts but it actually does 1:41 doesn't it money can cost a lot or it 1:43 can be can be I guess uh cheaper than 1:45 usual you know there's a difference 1:47 between good dead and bad dead isn't 1:49 there yeah exactly and a lot of the time 1:51 people don't realize this until they're 1:53 later stage in life when they've 1:55 borrowed money paid it back with 1:57 interest and uh and used debt for their 1:59 own benefit so I've learned through 2:01 personal experience and professional 2:03 experience so I really love to share 2:04 that wonderful wonderful so I guess like 2:07 all of us that have been around the 2:09 traps a little and you you get a few 2:10 wrinkles and a bit of gray hair and or 2:13 hair that's just disappearing these days 2:15 I guess but I think one of the things uh 2:17 do you tend to learn from good 2:19 experiences or bad experiences in your 2:21 in your time Victor bit of both actually 2:25 uh I mean I mentioned you mentioned 2:27 earlier that I've been in the the game 2:29 since I was 19 to give you some contexts 2:31 I'm 37 now so that's 18 oh so 2:37 old yeah but I tell you what though 2:39 people get onto the uh debt bandwagon 2:42 pretty early these days with uh your buy 2:44 now pay laders and credit cards and you 2:47 know if they don't they don't teach you 2:48 this stuff at school like how does this 2:49 stuff work it's it's so easy to get 2:51 credit and uh through these lessons uh 2:55 you learn actually I probably shouldn't 2:57 have taken out that personal loan I 2:59 probably should have you know taking out 3:01 too many credit cards but I should have 3:03 invested in property earlier when I was 3:05 younger so that's what I like to share 3:06 as well it's a fascinating thing against 3:09 Victor one of my regular contributors to 3:11 Dollars are making sense is Philip a 3:13 hunt who does a lot of Education with 3:16 women largely uh single women over the 3:18 age of 55 because unfortunately there 3:21 are you know that's the biggest age 3:23 group of people getting themselves into 3:25 trouble but certainly a lot of 3:27 youngsters are getting themselves into a 3:28 lot of trouble because of things like 3:30 buy now pay later uh and I guess that's 3:33 one of the reasons I wanted to to bring 3:35 you on the show to talk about that 3:37 because we talk about money around our 3:40 dinner table but you're absolutely right 3:42 you know when we've gone and approached 3:43 our local schools to talk about Finance 3:47 the curriculum's very full and it 3:48 doesn't get taught at school so how are 3:51 people how are youngsters picking up 3:53 their information about what is good 3:55 debt and bad 3:57 debt it's a good question because I 3:59 don't consider myself a youngster 4:01 anymore but what it's a matter of 4:04 context Victor it's 4:06 context but what I've heard is a lot of 4:09 them are are watching Tik Tok videos uh 4:11 YouTube Instagram and as you said a lot 4:14 of the uh Finn uh fluences right 4:17 Financial influencers so I don't 4:19 consider myself a financial influencer I 4:22 am an Australian credit license holder I 4:23 do have a mortgage broking and 4:25 Commercial broking business uh but at 4:27 the same time I'm also a consumer so and 4:30 I'm an investor so I like to share from 4:33 both sides of the spectrum from 4:35 borrowing and also from investing and 4:37 also from what my clients do in in a 4:40 sort of a optimized and an effective tax 4:43 effective way so podcast is probably you 4:46 know great medium to do that I have my 4:49 own podcast as well which I I share a 4:50 lot of these insights but um yeah the 4:54 banks really unfortunately you know and 4:56 the financial institutions you know 4:58 they're earning interest on and and 5:00 charging you fees but they're typ 5:02 typically not going to educate you on 5:04 how to optimize it for your own benefit 5:06 right they'd probably prefer you carry 5:08 the debt for as long as possible it's 5:10 one of those fascinating things I can 5:12 actually speak as the voice of 5:13 experience that I can remember back in 5:16 the day in 1978 when bank card first 5:19 came out and this was before you were 5:21 born Victor and and so from that 5:23 perspective when bank card came out 5:25 MasterCard and Visa were overseas Brands 5:29 and Amic Express and Japanese credit 5:32 bureau JCB as other people might know it 5:35 or diners were all International Brands 5:37 but not here in Australia and so when 5:39 bank card came out this was a credit 5:41 card that was pushed out by the big four 5:43 major Banks and I grabbed one I thought 5:46 beauty let's go uh and in the space of 5:50 you know 12 to 18 months Australians 5:53 racked up some enormous amount of debt 5:55 because they gave these to everybody and 5:58 you know when we dial the clock full it 6:01 doesn't seem to be that much restraint 6:04 even now given all those years of 6:06 experience is that your experience as 6:08 well Victor yeah yeah exactly I mean 6:12 when I was 18 I was working in in retail 6:15 at KS and I wanted to buy a car and I 6:18 walked into uh my bank which was St 6:21 George bank at the time and you know 6:23 they approved me and I was on a casual 6:25 income they approved me $8,000 credit 6:28 card uh and they also approved me for a 6:32 uh 5,000 no sorry it was a $5,000 credit 6:35 card and an $88,000 personal loan 6:39 straight on the spot so it was easy to 6:42 get money and it's and it's gotten 6:43 easier and then they uh entice you with 6:47 um limit increases so I I I went through 6:50 that cycle where I was like oh well 6:52 they've given me a limit increase so it 6:54 felt good so I took it and at one point 6:56 I even had five credit cards five 7:00 yes yeah and I was going through the the 7:03 the experience working for a financial 7:05 institution so I was learning you know 7:08 both ends you know I did realize over 7:11 time that five credit cards or more 7:13 credit cards is not actually a positive 7:15 thing but at the time it felt like it 7:17 was I was like well I've got access to 7:18 all this credit and um so yeah like that 7:21 was my from the personal side of things 7:23 and then you know buy now pay later has 7:24 only sort of come out the last few years 7:27 and I can personally attest that I've 7:28 I've never used it I've I've had clients 7:31 that have had them and closed them in 7:33 order to get their mortgage applications 7:35 across the line but yeah we'll talk 7:37 about that we'll pick up on that in the 7:39 second half of the show but I think 7:41 what's fascinating for me is that over 7:42 the years when bank card first came out 7:46 uh access to the card was free uh mind 7:48 you banking services back then did not 7:51 have the kind of fees you could open a 7:52 bank account at that time and not be 7:55 levied the kind of fees and charges that 7:56 we are today and so gradually over a 7:59 course of time the big four have 8:01 certainly made their their claim stake 8:03 their claim to how much fees they make 8:06 from all of us on a daily and yearly 8:08 basis but I think you know the idea of 8:11 having five credit cards when I think 8:12 the average fee for a card is you know 8:15 anywhere between $50 to $200 per card um 8:19 all of a sudden those kind of costs can 8:22 can be quite prohibitive and so that 8:24 together with the vast majority of 8:26 credit cards that I'm aware of and 8:28 please you know tell me if I'm wrong but 8:30 that money costs anywhere between 20 to 8:33 24% um when rates you know home loan 8:36 rates right now are around the sevens 8:38 and eights and so that's triple the cost 8:41 of what a home loan and I might remind 8:44 ladies and gentlemen as well during the 8:45 pandemic when interest rates were at 8:47 record 8:48 lows uh and the RBA was at 0. one of a 8:52 percent credit cards were still at 24% 8:55 so I'm just sitting there on somebody's 8:57 making a killing 8:59 yeah no no it's true you know you don't 9:02 realize what you're actually paying in 9:04 interest what you you know I come of 9:07 what year it was but there was some 9:08 legislation that basically said that on 9:10 the statements the uh financial 9:12 institutions that offer credit cards the 9:14 banks uh actually have to disclose how 9:16 long it will take you to pay the credit 9:18 card off if you made the payment but 9:20 when I was getting credit cards that 9:21 wasn't on the statement so you make the 9:23 minimum and literally it's just a it's 9:25 interest and maybe a a very small 9:28 percentage of of principle 9:30 and it can take 15 20 years sometimes to 9:32 pay pay back 10 grand it's ridiculous so 9:36 so it takes my breath away just hearing 9:39 those numbers because I think and I've 9:43 come across i i i as somebody in finance 9:47 thankfully I guess from my perspective I 9:49 don't deal with day-to-day punters when 9:51 it comes to this but I've been asked by 9:53 members of my direct and indirect family 9:56 sometimes to step in and help and I'm 9:59 you've probably seen this yourself 10:00 Victor you see some tragic errors and 10:04 you know when you've got five credit 10:05 cards I've seen people use credit cards 10:07 to pay off other credit cards and so 10:10 they're What's called the debt rollover 10:11 so they're rolling debt over with more 10:13 debt which is just I I I I I I want to 10:17 scream because you are paying so much 10:20 money in in interest that it's just 10:23 frightening when you think about it 10:24 really well that's exactly how I got to 10:27 five credit cards so oh really so you 10:30 were in that trap I was in that trap so 10:32 the way they get you and it does work if 10:35 you do it right so what happens is you 10:37 do what's called a balance transfer so 10:39 you apply for One credit card to pay out 10:41 the other but then what happens is that 10:44 bank doesn't pay the other credit credit 10:47 card out directly so sometimes they 10:49 actually pay you and then therefore you 10:51 have access to to you know cheap money 10:53 potentially that's what happened to so 10:55 they give you the cash to pay the card 10:57 hoping that I'll actually do it oh no I 11:00 thought that that went directly on the 11:01 card that you had no choice maybe now 11:03 but at the time it wasn't the case they 11:05 literally gave me a bank check in my 11:07 name and I could just go spend that look 11:09 I'll be honest I did pay it to the 11:10 towards the card that wasn't the issue I 11:13 did honor that but I can see where many 11:15 people wouldn't atted to use that money 11:18 right that's like giving heroin into a 11:20 junkie isn't 11:22 it and on and on top of it they can't 11:25 control whether you Clos the card so 11:27 therefore exactly what you happen say 11:28 you got 5,000 owing you apply for 11:31 another 5,000 you pay out the other card 11:33 and you honor that right or they pay 11:35 directly they can't enforce you closing 11:37 that card so now you've got one that's 11:39 free with 5,000 available and another 11:41 one that's maxed out so if you don't 11:43 close the other one you have got two 11:44 cards you see that's how I can quickly 11:45 get to five wow wow it's fascinating I 11:50 guess because in that regard when I I 11:53 helped somebody in my family using one 11:56 of these um balance transfer facilities 11:59 I read the PDS I actually I'm one of 12:02 those anal people I I read terms and 12:04 conditions and I read the terms and 12:06 conditions of this particular transfer 12:08 and ladies and gents it's all well and 12:10 good but once you actually use the card 12:13 that the the new one they've given you 12:15 um when you pay that off all the money 12:18 you've taken um for the cash to help pay 12:21 the other one then starts acur interest 12:24 as well and um it's it's a nasty trap 12:27 and when I read the the terms and 12:29 conditions I grabbed the card from my 12:32 family member and cut it up on the spot 12:34 and we just used the cash and paid it 12:36 off but look we're about time for a 12:38 break here on dollars and making sense I 12:40 have Victor Lagos from Lagos Financial 12:43 we're going to go for a short break and 12:44 we'll be back in just a 12:46 moment hi and thank you for listening to 12:49 Dollars and making sents a weekly radio 12:51 program about Finance money and 12:54 investing on radio Northern beaches and 12:56 nationally on the community radio 12:57 network around Australia the views 13:00 comments and opinions aired during our 13:02 program should not be construed or 13:04 viewed as Financial advice any 13:06 commentary is general advice only and 13:09 does not take into account your 13:10 objectives financial situation or needs 13:13 you should consider whether the advice 13:15 is suitable for you and your personal 13:17 circumstances if in doubt you should 13:19 contact an authorized licensed financial 13:22 planner we welcome questions and 13:24 feedback and you can get in touch with 13:26 us via our blog social media channels or 13:28 email 13:29 please search for dollars and making 13:31 cents in your favorite podcast platform 13:33 or check out our blog at OTG capital.com 13:37 au/ 13:38 [Music] 13:43 blog hi and welcome back to Dollars and 13:46 making cense a weekly show about Finance 13:48 money and investing I'm your host Ray 13:50 Trevon at the microphone this week we 13:52 have Victor Lagos not Lagos like I said 13:55 before the break I apologize Victor I've 13:57 got to get names right names are your 13:59 most important thing ladies and gents 14:01 it's something that I've had drummed 14:02 into me get the name right so it's 14:05 Victor Lagos so Victor before we went to 14:08 the break we were talking about credit 14:09 rollover being such a burden on people 14:12 and when I think about young kids today 14:15 they've got hex debt which is what we 14:16 didn't have when we were growing up so 14:18 you've got hex debt people then 14:20 potentially get credit card debt they're 14:22 rolling over credit and then Along Comes 14:24 This tsunami of by now pay later and we 14:28 normally don't mention company names but 14:31 I'm going to mention a few afterpay zip 14:33 pay uh and there's another of others 14:35 there's a again there's a fair bit of 14:38 credit out there latitude uh is a big 14:40 company doing a lot of um advertising so 14:44 so Victor what's your big suggestion 14:46 then what's your takeaway for people 14:48 listening today to not get caught by 14:50 these 14:51 traps okay so the Temptation is and the 14:54 ease is and the convenience is what 14:56 makes by now pay letter work so if you 14:59 look at spending say uh $500 on 15:02 something and you have money in your 15:04 bank account to cover that and they say 15:06 you know what you can actually pay this 15:08 off in six installments instead and you 15:11 know oh you know what I only have to 15:12 spend 83 bucks therefore I can keep my 15:15 500 or 400 and so it's like why not just 15:18 do that I can see that that's the the 15:20 reason what people uh will go for it but 15:23 what you don't realize is that you're 15:25 actually stealing from your future self 15:28 instead of giving to your future self 15:29 see that's the concept that got me okay 15:32 I like that I like that stealing 15:35 stealing from yourself because think 15:37 about this you know you buy it and you 15:39 have the feeling that it feel feels good 15:41 let's just say you're buying a new a new 15:43 mobile outright and you you know you get 15:46 the new mobile phone and then after 15:48 about a week you got used to it feels 15:51 all right now you're used to it just 15:52 like your previous phone right so you've 15:55 enjoyed that feeling but now your future 15:57 self has to pay it back so for the next 16:00 six installments or if it's on a credit 16:02 card however long it takes you pay it 16:03 back now you have to pay it back while 16:06 your past self got to enjoy that while 16:08 your future self is like oh thanks past 16:10 self now I got to deal with this 16:12 right because now it's affecting your 16:14 pay packet in the future no longer the 16:16 past pay it's not like you put money 16:18 aside dedicated for that right it's 16:20 going to come out of your next pay 16:21 packet and maybe the one after that too 16:23 but then if you think about it from the 16:24 other way around if you that's that's 16:26 what's called instant gratification if 16:28 if you have what's called delayed 16:30 gratification the other way around is 16:32 giving to your future self so if you if 16:34 you don't want to part ways with your 16:36 $500 right now then put away $83 per 16:40 week per fortnite however how often you 16:42 get paid and then each time you do that 16:44 it feels good because you know that 16:46 you're putting money aside and you're 16:47 going to give to your future cell and 16:49 you're managing your money you're you're 16:51 actually you know in control of in 16:52 control yeah very much so so it's very 16:55 much there used to be a cartoon that I 16:57 remember growing up where you had a 16:59 little devil and a little angel on 17:01 either shoulder and and the devil was 17:03 talking in one ear and the angel in the 17:04 other and I guess it's very easy when 17:08 you think about what's transpired over 17:11 the last sort of four to five years with 17:13 the pandemic with the increased payments 17:16 with people I guess with a lot of time 17:18 on their hands and I know internet 17:20 spending went through the roof as did 17:22 internet gambling uh which again these 17:26 are things that I look at and these are 17:28 disasters waiting to happen when you are 17:31 trying to create wealth and I'm not 17:34 trying to be a Debbie Downer here Victor 17:36 because I'm a huge believer in in self- 17:38 responsibility and also if you're out 17:40 there and you've worked hard you've got 17:42 every right to spend your money the way 17:45 you want that's what freedom of choice 17:47 is the difficulty becomes as you've 17:50 rightly pointed out if you're stealing 17:52 from yourself and then your future 17:53 self's looking back I mean these are 17:56 these are tough things to to really 17:58 start you know thinking about and I've 18:00 seen b our pay lad now extending into 18:03 even meals where you go out to dinner 18:06 and I've seen restaurants that actually 18:09 bnpl uh $150 dinner out all of a sudden 18:13 you're still paying for that six weeks 18:15 later I mean that really nice pizza 18:17 restaurant you went to that tastes long 18:20 gone exactly that's right and the other 18:23 thing is if you're doing it more often 18:25 than not and multiple providers um or 18:28 multp little contracts what you're 18:30 actually doing is enforcing that idea of 18:34 uh instant gratification and and 18:36 therefore you're not thinking about the 18:38 future and then when you're when you're 18:39 saying I want to now buy a house or I 18:41 want to invest in property well you you 18:43 need to now work hard to train your 18:45 brain to actually put money aside 18:47 because you need a significant deposit 18:49 now but you're used to getting what you 18:51 want right now without your money so 18:53 you're now you're you're on the back 18:54 foot but if you start training yourself 18:56 putting money aside each pay pay check 18:59 eventually you do have enough to pay 19:01 that mobile outright you thank your past 19:03 self and say thank you for putting money 19:04 away you look after me and now you own 19:07 the phone outright so you have that 19:08 positive feeling moving forward now 19:11 Victor I wanted to to ask you a more 19:13 in-depth question you mentioned in the 19:15 first half of the show that you've been 19:17 talking to some of your clients who have 19:19 had to get rid of their bnpl when 19:21 they're applying for a loan now I've 19:23 heard these stories as well that credit 19:25 cards and bnpl accounts can actually be 19:28 a big detractor so as a mortgage broker 19:31 what do you advise people that walk into 19:33 your office and say to you hey Victor I 19:35 want to take out a loan and they've got 19:37 these maybe even if they don't have debt 19:40 but if they've still got a credit card 19:41 that could be a problem couldn't it yeah 19:43 so banks will always look at the worst 19:45 case scenario and that is if you decided 19:48 to max out your buy now pay laders up to 19:50 their limit and max out your credit 19:52 cards so many clients tell me oh I clear 19:54 it every single month or I pay it every 19:56 single time so the bank should only look 19:59 at that and say no no no they don't look 20:01 at that they look at what's the worst 20:03 case scenario so sometimes people are 20:05 carrying really high limits you know 20:06 they have a u you know a zip pay account 20:09 for five or 10,000 so if they can bring 20:11 that down to $1,000 or you know even 20:14 better close it that's going to improve 20:16 their borrowing capacity and it's also 20:18 going to make them um look better to the 20:20 bank because they've you know closed 20:23 that so now that's showing on their 20:24 credit file as closed that improves your 20:27 credit score see people have the 20:28 misconception that oh I need to have 20:30 debt in order to improve my credit score 20:33 no you literally just have to have a 20:34 credit file and make your you know and 20:37 never fall make your payments and that's 20:39 it that's enough to get your credit 20:40 score it will get better over time as 20:42 you age and then when you take out a 20:44 mortgage and you make those payments 20:45 it'll improve too so yeah that's also 20:48 misconception out there I guess another 20:51 misconception and again correct me if 20:52 I'm wrong because you see this day by 20:54 day I don't is it true that the banks 20:56 are now looking at what's on you credit 20:59 card and how many coffees you're having 21:00 on a weekly basis is that true it's a 21:03 good question actually right so some 21:06 banks yes uh so 21:08 through will when should that be any of 21:11 their business I like hey I'm Italian I 21:13 like my coffee I mean if they're going 21:14 to tell me I can't have my coffee it's 21:16 like hang on a moment guys what what 21:19 they do is they look at your transaction 21:21 uh history including your credit cards 21:23 and they work out what did you actually 21:25 spend in the full month versus what you 21:28 deced and they have a a measure called 21:31 hem household expenditure measure all 21:33 the banks use it it comes from the 21:35 Melbourne Institute and this is an 21:37 estimation of what a household would 21:39 spend based on how much income you're 21:40 earning based on your location based on 21:43 how many in the household and that's 21:45 their minimum but if you declare that 21:46 you spend less than that they're still 21:48 going to use that as their minimum but 21:50 if you declare less and then they check 21:53 your credit cards and your transaction 21:55 statement it adds up to average out more 21:57 than what you've declared they're gonna 21:59 ask the question and say wait a minute 22:01 aren't you actually spending more 22:02 because your cards are showing that you 22:04 are wow yeah yeah for sure but look not 22:06 all banks will ask for that and this is 22:08 where it's my job as a broker to find 22:10 the banks that actually are a bit more 22:12 you know U realistic because let's face 22:14 it when people take out loans to buy 22:16 property they're usually going to also 22:18 adjust their spending right they're not 22:19 going to always go out every single 22:21 night you know they're going to adjust 22:23 it because they're taking on a new debt 22:25 so that's the other thing it doesn't 22:26 account for I've got a tell you it would 22:29 be a very interesting thing for people 22:31 my age uh and I'm considered a boomer 22:34 although I still think I'm a little 22:35 young in that space But when we were 22:37 going for our mortgages um I actually 22:40 borrowed money from the the bank of mom 22:42 and dad because uh back then if you 22:45 didn't have a long-standing relationship 22:47 with a bank they wouldn't lend to you I 22:48 mean these days you can turn up to any 22:50 bank they may not know you from from 22:52 Jack but they'll still lend you money if 22:54 you pass all the tests that you've been 22:56 talking about but 22:59 I guess it's a fascinating thing because 23:01 again I people my age say oh the kids 23:04 don't know you know we had to go through 23:06 18 you know 18 19% and that's a fair cop 23:09 that's a fair comment but the the the 23:13 real difficulty these days is that the 23:15 average cost of a house now for example 23:16 here in Sydney and even in Melbourne and 23:18 many other Regional centers where this 23:19 show is is taken and listened to is not 23:22 two or three times when I was in my 20s 23:25 it's 10 to 12 times and so you know you 23:29 are talking to people on a daily basis 23:31 what kind of deposit are people walking 23:33 into your office and saying hi we're 23:35 ready to buy a 23:36 place well if it's for an owner occupier 23:40 buying their first home um you I'm 23:43 talking to one for example looking at 23:45 buying in Sydney for 650,000 which is 23:49 very difficult to find that's a unit um 23:51 in most places and she has a deposit of 23:56 135,000 that's and that's with stamp 23:59 Duty waved right because as a first home 24:01 buyer have first time buyer of course 24:03 yes yes yes correct but if if you don't 24:06 have the stamp Duty way because you've 24:07 owned property before or you're buying 24:09 an investment into State then you would 24:12 need upwards of 150,000 to cover the 24:15 deposit and that's to avoid lenders 24:17 mortgage insurance so and have a 24:19 competitive interest rate right so 24:21 that's yeah yeah go on now before finish 24:24 up because Victor I'm definitely going 24:26 to have you back on the show can you 24:27 please explain to me when people have to 24:29 take out mortgage insurance who is that 24:32 insurance actually 24:34 covering yeah so it's called LMI lenders 24:37 mortgage insurance and it's actually 24:39 there to protect the bank not the actual 24:41 borrower it's so that if they big 24:44 misconception isn't it misconception 24:46 yeah and another misconception is that 24:48 is that you uh can switch Banks so 24:51 people will say you go in at 90% in uh 24:54 loan to value ratio and you pay you know 24:56 lender mortgage insurance 24:58 if you then decide to refinance and go 25:00 to another bank if that's still at 90% 25:03 or 85% because the value's gone up 25:05 slightly you now need to pay LMI again 25:08 with another bank even if it's the same 25:10 mortgage insurer they'll still charge 25:12 you again so they're double dipping 25:14 because it's a different bank you're 25:15 going with or lending institution and 25:18 you don't get a refund either so it's um 25:21 it can be quite costly so if you can 25:23 avoid it the better other times if it's 25:26 a cost of doing business and you're 25:27 Building Wealth through property it's a 25:29 it's a strategy it's also tax deductible 25:31 but when you're moving into your your 25:33 you know your first home or an owner 25:34 occupied property if you can get that to 25:36 80% or below it's going to give you 25:39 better options and it's going to allow 25:40 you to switch Banks later in the case 25:42 that you need to to get a better rate 25:44 and I might add ladies and gents if 25:46 you're listening you know it wasn't uh 25:50 overly common in my time we didn't go 25:52 out and buy a home straight off we 25:54 bought an apartment I mean when when I 25:56 was going out to buy my very first when 25:58 I got out of the Defense Forces there 26:01 was no way known I could afford a house 26:03 I mean that was just way out of my 26:04 league and so you know buying an 26:06 apartment was always in my view that 26:08 first rung on the real estate property 26:11 um mergo round that I I remember I I 26:14 hopped on it I think at the ripe old age 26:16 of 28 or 29 but uh thankfully stayed on 26:19 it ever since but you know Victor look 26:22 there's so many things we can be talking 26:24 about and I mean the little check sheet 26:26 you sent me some some great topics and I 26:30 really like you know one of the key 26:31 takeaways I want people to think about 26:33 is gifting themselves and stealing from 26:36 themselves that's a great message um 26:39 that that I think we can leave our 26:40 listeners and you know Victor Lagos 26:43 losos Victor Lagos Victor Lagos from 26:48 Lagos from losos Financial it's been a 26:51 real pleasure having you on the show 26:53 thanks Ray I really appreciate it and uh 26:56 if those who you want to uh listen to my 26:58 content you don't even have to be my 26:59 customers I also have my own podcast 27:01 it's called debt to Financial Freedom 27:04 and you'll find that on uh you know 27:05 Spotify and YouTube and whatnot so 27:07 wonderful happy to give it a big plug 27:09 good education out there ladies and 27:11 gentlemen Good Financial education 27:13 remember save for yourself not for the 27:17 banks don't steal from yourself give to 27:19 your future absolutely Victor losos 27:22 thank you so kindly for your time today 27:24 no worries at all thanks Ray thanks for 27:25 having me on appreciate it 27:36 e