Refinance Archives - Focus Property Wealth - Perth Mortgage Broker

Redraw vs offset: what first-home buyers should know

glennadmin — Mon, 25 Aug 2025 11:48:50 +0000

If you’re planning to buy your first home this spring, you’re not alone. It’s one of the busiest times in the property market, with more listings and more competition. That’s why it’s important to be well prepared.

Beyond interest rates, there are other features that can make a big difference to your loan and how much interest you pay. Two of the most common are redraw facilities and offset accounts. While they both help reduce interest, they work in slightly different ways.

Here’s a breakdown of what they mean and how to choose the option for your needs.

What is a redraw facility?

A redraw facility allows you to make extra repayments on your home loan and then access those extra funds later if you need them.

For example, if your minimum repayment is $2,000 and you pay $2,500, the extra $500 goes towards your loan. This lowers the balance and reduces the interest charged. If needed, you can request to withdraw that extra amount at a later date.

Pros:

Lets you pay down your loan faster by making extra repayments
Helps reduce interest over time while keeping funds available

Things to consider:

Some lenders place limits on how much you can withdraw or how often
Withdrawals may not be available instantly
Fees and conditions may apply

I can help you understand which lenders offer flexible redraw options that suit your financial plans.

What is an offset account?

An offset account is a transaction account linked to your home loan. It works like an everyday bank account – you can have your salary paid in, use a debit card, and pay bills directly from it.

The money in the account is “offset” against your home loan balance. For example, if your home loan is $500,000 and you have $20,000 in your 100 per cent offset account, you are only charged interest on $480,000.

Pros:

Reduces interest charged while keeping your money accessible
Can be used for everyday banking, helping you stay organised
May help you pay off your loan sooner

Things to consider:

Some lenders charge higher fees for offset accounts, or have limits on how many you can open
Not all offset accounts reduce the full loan amount – some offer only partial offset

As your broker, I can help you compare lenders to find an offset account that matches your spending and savings habits.

Choosing the right loan features

If you’re just starting to explore your home loan options, it’s okay not to have all the answers. The most important thing is to choose a loan that suits how you want to manage your money.

Some loans include redraw or offset features as part of the package. Others may charge more or offer fewer benefits. I’ll help you make sense of your choices so you can borrow with confidence and avoid paying more than you need to.

Planning to buy this spring?

Now is the ideal time to get organised. If you’re looking at buying in the coming months and want to understand how loan features like redraw and offset accounts can help, let’s chat. I can also help you get pre-approval sorted so you’re ready when the right property comes along.

Please get in touch today! Regards Glenn Biggins.

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. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article 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.

The post Redraw vs offset: what first-home buyers should know appeared first on Focus Property Wealth - Perth Mortgage Broker.

Buying an apartment vs a house as an investment

glennadmin — Sun, 03 Nov 2024 12:03:11 +0000

Do you want to jump into the property market but don’t have the budget to buy a house? A unit or apartment could be a great way to get your leg up on the property ladder.

According to CoreLogic data, unit values are now rising at a faster rate than houses in more than half of all suburbs across Australia.

Aside from being more affordable than a house, there are other benefits of apartment investing to consider. Let’s look at some of the pros and cons of investing in an apartment versus a house.

Pros of investing in an apartment

A more affordable entry point

The median house price in Australia’s capital cities is now $975,592. Compare that to the median unit price of $669,434 and that’s a big difference at the checkout.

With apartments generally being more affordable than houses, it means you’ll need to save up less of a deposit (usually around 20% of the purchase price), and you may find servicing the loan on an apartment easier too.

Fewer maintenance responsibilities

When you own a house, you have to foot the bill for all of the repairs and maintenance. With an apartment or unit, the costs of any repairs or maintenance in common areas is split with other unit owners, usually through a body corporate scheme.

Generally speaking, there’s usually less maintenance required on a unit compared to a house. There may not be a lawn to mow, for example.

Certain expenses can be more affordable

Some expenses can be cheaper when you own a unit. Council rates, for example, are usually higher for houses and may even include land taxes in some states.

If you’re paying smaller fees on an investment apartment, the returns on your investment can potentially be higher.

Potentially higher rental yield

Units often have higher rental yields than houses because you’re able to outlay less money to potentially acquire a similar rental income. This may mean you are in a better position to cover your mortgage repayments and other expenses.

Cons of investing in an apartment

You may need to pay strata fees

In a strata scheme, you’ll need to pay body corporate fees and factor these into your ongoing budget. Strata fees can be pricey and increase over time.

If there’s an onsite manager, pool, tennis courts, barbecue area and gym, expect higher fees than an apartment block with fewer facilities.

There may be restrictions

If you want to renovate your apartment, you may need to run the changes by the strata committee for approval, particularly if it affects the exterior of your apartment or any shared utilities.

There may also be restrictions around having pets, too, which could reduce your tenancy pool.

Oversupply can affect your investment

If you buy an apartment in an area where loads of high-rise apartment blocks are being built, it can affect your property’s capital growth, rental yield and demand from tenants.

Generally speaking, experts recommend seeking low-rise or boutique apartments in areas where planning rules cap the number of apartment buildings allowed.

Want to discuss your finance options?

Whether you’re looking to buy a small studio apartment, a bigger unit or a house, we can help you explore your finance options.

We’ll run you through the investment loans available to you and explain which may suit you, based on your individual financial situation and goals.

Get in touch today.

However, it’s important to remember there’s no one-size-fits-all approach to buying your first property. For some, it could be a home to live in. For others, rentvesting makes more sense as it can offer a great alternative to get a foot up on the property ladder.

Ready to get started?

As your mortgage broker, we’ll organise everything, explaining the process, keeping in touch and keeping you updated, so that everything runs smoothly.

Please get in touch today! Regards Glenn Biggins.

The post Buying an apartment vs a house as an investment appeared first on Focus Property Wealth - Perth Mortgage Broker.

Rentvesting: is this a good option for first-time buyers?

glennadmin — Thu, 15 Aug 2024 06:38:15 +0000

With today’s cost of living pressures and the median dwelling value in Australia now at $794,000, many young Australians feel like they’ll never be able to enter the property market.

What is rentvesting?

Reinvesting is when you rent where you want to live and buy where you can afford.

By rentvesting, you can earn an income from your rental property, pay off the mortgage and potentially cover the costs of owning the property, all while continuing to live in a suburb you enjoy.

Why do people choose to rentvest?

One of the biggest motivators of buying an investment property is the potential to make a return via capital growth. This is when your property increases in value over time.

If you’re positively geared (that is, the rental return is higher than your home loan repayments and other property expenses), a rental property can also offer you an additional income stream.

Another reason people choose to rentvest is that it’s another way to enter the property market, without having to purchase a home to live in. Maybe you’ve grown fond of your inner-city apartment (that’s unfortunately out of your price range) and don’t want to move out to the “burbs”? With rentvesting, you can own your own slice of real estate where you can afford and still have the flexibility to live where you want to live.

What to know before going ahead with rentvesting

1. Potentially smaller deposit, but fewer government perks

If you choose an investment property that’s more affordable than the home you intend to live in one day, your deposit will be smaller. It might be easier to save a deposit if you go down the rentvesting route.

However, because you’re an investor and not a first-home buyer, you won’t benefit from government schemes such as the First Home Owner Grant and First Home Super Saver Scheme, which would only apply if you were living in the property.

2. There are ongoing costs to factor in

If you’re rentvesting, you’ll need to budget for all of the costs associated with owning the property (e.g. the mortgage repayments, management fees, rates, water bills, maintenance, insurance, and strata levies if it’s under a body corporate scheme).

Keep in mind, the rental income may cover some, if not all, of these costs. You’ll also need to cover your own rent too.

3. Investor loans could come with higher interest rates

As a rentvestor, you will have an investor loan. These typically come with higher interest rates than owner-occupier home loans.

This means your mortgage repayments may be larger than if you were living in your own home.

4. There will be tax implications

At tax time, your accountant will ask for information about your investment property, including the rental income and expenses (most of which can be claimed as tax deductions).

Your accountant can guide you about the tax implications of owning a rental property, such as the potential for capital gains tax (if your property goes up in value) when it comes time to sell.

Like to know more?

If you want to get started in the property market sooner rather than later, rentvesting could be the way to go.

To explore your finance options, get in touch. We’ll help you work out whether rentvesting is right for you.

Ready to get started?

As your mortgage broker, we’ll organise everything, explaining the process, keeping in touch and keeping you updated, so that everything runs smoothly.

Please get in touch today! Regards Glenn Biggins.

The post Rentvesting: is this a good option for first-time buyers? appeared first on Focus Property Wealth - Perth Mortgage Broker.

Refinancing your home loan: how does it work?

glennadmin — Fri, 19 Jan 2024 06:00:13 +0000

When you’re busy with life, refinancing can seem like a hassle. However, with a mortgage broker to guide you through the process, it doesn’t have to be!

Refinancing may allow you to switch to a more competitive home loan, thereby potentially saving you money in interest.

It can also help you achieve other goals, like using different finance options to renovate your property or consolidating your debt and paying it off more efficiently. You may even consider refinancing to access equity to buy an investment property or another big-ticket item like a pool.

Here are the steps involved in the refinancing process:

Step 1: Work out your financial goals

Do you want to find a loan with a lower interest rate? Perhaps you’d like to explore some of the interest-saving loan features that are available nowadays, like offset accounts and redraw facilities?

It’s important to understand what your financial goals are so that we can help you to access the finance you need to achieve them.

Step 2: Compare home loan options

Next, it’s time to do some research.

Trying to understand all the different home loan options available and consulting with different lenders can be time-consuming and overwhelming. Instead, get us to do the hard yards for you.

We can explain which home loans may be suitable and help you narrow down your options.

Step 3: Submit your loan application

Once you’ve decided which home loan is right for you, we’ll take care of your mortgage application.

Just like when you applied for your original loan, you’ll need to supply certain documents. These usually include identification, proof of income, home loan statements, and records of living expenses, liabilities and assets.

The new lender may also require a property valuation. This helps them to determine how much they are willing to lend you.

Step 4: Discharge your existing loan and settle your new one

When your chosen lender approves your new loan, we will let your current lender know you plan to discharge, or pay out, your existing loan.

We’ll keep you informed throughout the settlement process and let you know when your new lender has paid out your old loan.

Step 5: Start making repayments

After settlement, you’ll receive documentation explaining the ins and outs of your new loan. Then, it’s time to start making repayments.

All up, for most cases the process of refinancing usually takes anywhere from four to eight weeks. The timeline depends on the lender, how quickly you submit the required paperwork and the strength of your application. Some lenders may offer a fast-tracked service.

Ready to get started?

As you can see, refinancing may not be as hard you think. If you’re interested in comparing what loan options are available for you, get in touch with us today.

Ready to Dive In?

Exploring finance options is a crucial step. Reach out to us! We’re here to guide you through the maze and help you align with your investment objectives.

Ready to get started?

As your mortgage broker, we’ll organise everything, explaining the process, keeping in touch and keeping you updated, so that everything runs smoothly.

Please get in touch today! Regards Glenn Biggins.

The post Refinancing your home loan: how does it work? appeared first on Focus Property Wealth - Perth Mortgage Broker.

When to leave your lender and consider a refinance

glennadmin — Thu, 14 Feb 2019 03:30:20 +0000

Valentine’s Day makes us think about loyalty – which is an admirable quality in any relationship. But is your devotion to your home loan provider justified? It’s important to ask your mortgage broker to help you review your home loan from time to time. We’re here to check the interest rate, review it’s features and make sure it’s still giving you everything you need and desire.

Here are some tell-tale signs that it may be time to part ways with your current lender and start afresh with someone new.

Your home loan is getting old

Without suggesting you go on ‘Home Loan Tinder’ and start ogling a new lender every week, we have to say the days of staying with the same one for 30 years are long gone. If you’ve had your home loan for more than two years, it could be time to review it. The home loan market is increasingly competitive and new products are being released all the time.

For example, take offset accounts. These transaction accounts are linked to your mortgage, and any money you deposit is offset against your outstanding loan balance, saving you money on interest. They just keep getting better and better, with a larger proportion of your loan available to offset.

Another popular option is a redraw facility. This allows you to make extra repayments on your mortgage and save on interest, without committing to a shorter loan term – you can access and withdraw those extra funds at any time.

The honeymoon period is long gone

When you first take out a home loan, lenders may offer you a sweetheart deal to get you in the door. It’s not uncommon for them to waive fees or discount interest rates to new customers – this kind of loan arrangement is frequently referred to as a honeymoon period or honeymoon loan. But once the honeymoon is over, the loan may revert to a more expensive or less convenient loan than you would like. If that’s the case, it’s time to look at new options.

Your lender doesn’t listen to a word you say

Nobody likes to nag. If you’re always chasing your lender about rates or ways to save, it may also be time to hit the bricks. Similarly, if you’re sick of talking to a voice recording over the phone and crave real human interaction, there may be other lenders who place greater importance on giving you the attention you deserve. If this is the case for you, ask us about our home-brand home loans, where we provide you with the after-care service ourselves.

Your needs are not being met

Maybe you’ve scored a higher paying job and want to pay down your mortgage faster. Perhaps you’re adding to your family and temporarily need to rely on one income for a time. If your needs have changed, you may find it more fulfilling to be with another home loan provider and a mortgage that marries with your current financial circumstances and goals.

Remember, there are plenty of fish in the sea!

As your mortgage broker, we can access 100s of loan products from a wide variety of lenders. We’ll also know which lenders and products are right for you, considering your personal financial circumstances and goals. Let us be your match-maker!

Don’t stay in an obsolete relationship with your lender. If you’d like to know more, or would just like a home loan health check with no obligation to switch lenders, please get in touch.

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6 questions to ask your mortgage broker

glennadmin — Wed, 07 Feb 2018 07:01:07 +0000

Did you know that your mortgage broker can help you with a lot more than a home loan? Mortgage brokers are qualified as ‘credit advisors’, so we can be of great benefit to you in a variety of different ways when it comes to your finances. To start you thinking about maximising your financial goals this year, here’s 6 questions you might like to ask us in 2018!

1. How can I clear my debts faster?

According to the Australian Bureau of Statistics, about 29% of Australian households are classified as ‘over-indebted’. The most common form of debt is credit card debt, which is currently a real bother to about 55% of us!

If you want to clear your debts faster, particularly credit card debts, the trick is finding ways to save on interest, so your money goes towards paying down your debt rather than maintaining it. This could mean rolling all your debts into one loan with a lower interest rate. We could help you do this with a personal loan, or perhaps by refinancing your home loan to pay off your debts. Call us if you want to talk turkey on debt consolidation!

2. What’s the best way to save for my child’s education?

Dreaming of your child becoming a Nobel Prize winner one day? Then a great education is key. Paying for something like a four year university degree twenty years from now is not so much a question of saving your extra pennies, but putting your money to work for you so it generates money for the future. Ideas? Use your home as a money tree – put any extra money you’ve got into your home loan now, then access the equity to invest as soon as you can. Or if you already have plenty of equity, talk to us about refinancing now to get a deposit for an investment property or some other form of investment.

3. How can I take a year off work to travel when I’ve got a mortgage?

Ah-ha! A tricky one, but talk with us because there are a number of things we could do to help, depending on your personal financial situation and how much equity you have in your home. For example, we could crunch the numbers for you to see if renting out your property would cover your repayments while you’re away. Or to make that strategy work for you, potentially negotiate with your lender so you could switch to interest-only for a while to reduce the size of your loan repayments. We may even be able to refinance your loan to help you cover some of your travel costs, and at the same time, extend your loan period to reduce your repayments so a renter could cover them.

4. My car loan repayments are a killer! What can I do about it?

Refinancing your car loan is not out of the question. If you got your car loan from a car dealership, chances are you’re paying a whopping interest rate – we recently heard of a client who was paying as much as 14.5% pa. If this is the case for you, we could potentially find you a loan with a lower interest rate, or extend your loan terms to reduce your repayments. It may even be possible to roll your car loan into your home loan. Talk to us and we’ll see what options are available for you, or if you want to purchase a car this year – we are here to help set you up for success.

5. I’ve always wanted a jet-ski. Is it possible to get a loan for that?

Yes! Even though we usually specialise in home loans, we can also access great loan options for other large purchases. We call these ‘lifestyle assets’ – which covers everything from jet-skis and boats, to other items you may need like cars, caravans, campervans and even horse trailers! Give us a call – you’ll be surprised how quickly we can get it organised.

6. I work for myself. Would I still be able to get a loan?

If you are self-employed, there is no reason why you can’t get a home loan if you have a steady income. We can also help you with finance for commercial vehicles, equipment you may need for your business, or insurance to cover your business and personal needs. Why not talk to us now? The right way forward for you depends on your current personal financial situation and future goals.

Got a twisty one? Go ahead and ask us!

We’re always available to help you with managing your finances and credit facilities. We’re very much looking forward to helping you get ahead in 2018, so if you have a question, please contact us. We’re happy to help.

Source: Australian Bureau of Statistics http://www.abs.gov.au/

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. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article 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.

The post 6 questions to ask your mortgage broker appeared first on Focus Property Wealth - Perth Mortgage Broker.

Refinance your Investment property loan?

glennadmin — Sun, 08 Oct 2017 10:33:21 +0000

The clever investor knows that assessing your investments regularly is key to identifying opportunities to build wealth. Knowing when to refinance an investment property could be vital to a successful strategy. So is now the time for you to refinance?

Talk to us and we’ll help you to decide! Despite recent tightening around investor lending, there are still some very competitive interest rates available from a variety of lenders. In this article, we cover some of the common questions we get from our property investor customers – and if you do decide you’re ready to refinance, you can rely on us to make it easy!

Why should I refinance my investment property?

There are generally two main reasons why you may want to refinance your investment property. These are to access your equity, or to change to a different loan.

If you’d like to expand your investment portfolio, refinancing to access your equity could be a good move. You could potentially use your equity as a deposit to buy another property, or to take advantage of some other kind of investment opportunity – talk to your financial planner to see what strategy is right for you. We work with a number of fantastic financial planner with one being Viva Wealth.

Accessing your equity to renovate could also be a good move. It could help you add value to your investment property, fast-track its capital growth and perhaps improve the rental value to increase cash-flow.

What kinds of fees are involved?

The good news is that when you refinance an investment property, the costs involved in exiting your existing loan and setting up another are usually tax-deductable. That includes the borrowing expenses and any exit fees or penalties. In the first five years of owning your investment property, you can usually claim borrowing expenses back incrementally, and if you refinance within that timeframe, you can claim the remaining tax deductions immediately. Talk to your tax accountant about the benefits appropriate to your situation. If you don’t have one, we’ll be happy to help you with a referral.

Should I use one lender or multiple lenders?

Professional investors often prefer to use multiple lenders to avoid cross-collateralisation. Cross-collateralisation is where you secure a loan against two or more properties instead of one – which can be inconvenient when the time comes to sell, and risky if property prices should fall. If you use one lender, your properties may be cross-collateralised by default. Having said that, some investors may prefer to use one lender. Overall, it depends on your individual financial situation, goals and the size of your investment portfolio, whether you may choose to go with one lender or several. Talk to us and we’ll help you decide which loan structure is right for you.

Should I refinance all my investments at the same time?

If you’re reviewing one mortgage, you might as well ask us to assess all of your investment loans to make sure they are up to scratch. You may decide you are happy with the deal you are receiving for some of the loans, and only proceed with refinancing others. Or you may decide it’s time to change the way all your loans are structured and if so, we’re here to help.

Talking to your financial planner or tax accountant is also a good idea, to make sure refinancing is the right strategy for you financially. If you’d like to chat or explore the kinds of investment loan options out there, please get in touch today. We’d love to help you find the right finance to fulfill your needs!

The post Refinance your Investment property loan? appeared first on Focus Property Wealth - Perth Mortgage Broker.

A step-by-step guide to refinancing your home

glennadmin — Tue, 22 Aug 2017 14:29:44 +0000

With a home loan it’s easy to just ‘set and forget’. But it’s sensible to review your home loan every three years or so and if savings can be made consider refinancing.

We're living in a world of rapid change, where interest rates go up and down fast, new lenders emerge and more competitive lending products become available on a regular basis. Under these circumstances, keeping the same home loan for 30 years could cost you more money than you need to spend!

In this article, we provide a step-by-step guide to refinancing your home, breaking it down into simple layman’s terms. But before we get into that, let us clear up a few common questions about refinancing.

WHY should you consider refinancing?

Generally speaking, there are four main reasons to consider refinancing.

Your loan may be outdated and you could potentially get a lower interest rate.
Different home loan features could work better for you.
Your financial situation may have changed.
You want to access some of the equity you’ve built up in your home.

WHEN should you consider refinancing?

There’s no time like the present! We're currently experiencing a low interest rate period, so there are many competitive home loan products available. Generally speaking, it's a good idea to review your home loan every two to four years.

WHO should you use to refinance?

You should always talk to a mortgage broker because our opinion is not biased towards any particular lender or product. And we won’t suggest that you refinance if it isn’t the right move for you.

HOW do you refinance?

We've explained the when, who and what of refinancing, but what’s the actual process involved? Here's a simple step-by-step guide.

Step 1: Speak to us

Before we begin exploring your loan options, it's important for us to have a sound understanding of where you're at financially and what you'd like to achieve. Whatever your goals, we're here to assist!

Step 2: Choose your mortgage and apply

We'll help you find the right mortgage to fit your personal financial circumstances and goals. Then we'll help you submit your application.

Step 3: Your new lender will perform a valuation

Your new home loan provider will require a valuation on your property as part of the application process. Keep in mind that their valuation might be more conservative than the market value you estimate.

Step 4: Get approved

Within a few days of submitting your application, it's likely our inbox will light up with that delightful email confirming you've been approved for your new home loan. Yay!

Step 5: Your old mortgage will be closed

Your new lender will contact your previous provider to co-ordinate your refinancing arrangement. The lender will submit a ‘discharge of mortgage’ form to the Land Titles Office in your state or territory to close your old mortgage account. Upon settlement, your new lender will pay out your existing lender with funds from your new home loan and take ownership of your property title. If you're refinancing to consolidate other debts, they will be closed too.

Step 6: You start afresh!

Once you have your new home loan in place, you can begin making repayments, satisfied that you have the most suitable mortgage for your needs. If you need any help managing your new home loan, we are always here to lend a hand.

We hope you'll find this guide to refinancing handy, and we would love to help you decide whether refinancing is the right step for you financially. Whether you are looking to refinance for a better interest rate, to access equity, consolidate debt or for a property investment to build wealth for your future, we can help you to achieve your goals. Please get in touch today!

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.

The post A step-by-step guide to refinancing your home appeared first on Focus Property Wealth - Perth Mortgage Broker.

Home loan savings to pay your home loan off….FAST.

glennadmin — Tue, 15 Aug 2017 06:11:48 +0000

PART 2 - The Solution

We will provide the solution to really turbocharge our clients plans to find home loan savings to pay their home loan off years faster. Previously we laid out a common client scenario.

The Solution....

To save John and Jenny they have decided to take the following action, each of these items will accumulate to reduce their home loan term without any additional repayments to the amount they are currently paying. Just like magic.

Refinance - to a new loan at a much lower interest rate - new loan will be at $420,000 on Bank option A, current repayments at $1,043 is used to determine the loan term along with item 2 below.
Consolidated car loan into refinanced loan - The $20,000 car loan is consolidated into the new home loan which will be at $420,000. It is important to not when consolidating a short time loan such as a car loan, if you were to pay that small loan over the longer term of a home loan then you will end up paying thousands more in interest. In this case the same repayments as the current car loan of $184 per fortnight will be paid into the consolidated home loan.
Offset all savings - all current savings will be moved into the newly setup offset accounts as they can have multiple offset accounts they can have a number setup for various household / living costs. As all accounts are 100% offsets accounts all funds save interest on the home loan so $5,000 will save around $192.50 per year. Granted this is not a huge amount but combined with the other items and interest saved over the term of the loan it all adds up.
Setup budgeting / accounts - This initially does not sound to exciting and many will want to switch off right now but this is the most important item. Some form of budget only serves to give you an overall snapshot on where your hard earned after tax income is going and like the interest rate slipping up to a higher rate over time there will be money leaving your accounts for things you had no idea you were paying for and probable do not need. Once you have an idea on the various areas you can setup a separate account for key items, if there is a item that perhaps you are prone to overspend on you would create a separate offset account for this and transfer your allocated amount in each fortnight / month. When that account hits $0 (or an allocate balance) you know your blown your budget. All this is designed to do is to help you put the brakes on pr readjust your budget. I will write a more comprehensive article on the account setup in a subsequent article however the government Money Smart website is a great starting point.
Set long time-frame goals - These are the realistic goals you hope to achieve that can be linked to something you want to do in your life, each goal should have a a dollar and date linked to it because doing stuff costs money right. Write each goal down and setup smaller targets and dates to get you there. Goals are fun because they are real and when you work towards and reach those goals, well that's what is all about. More on goal setting another time.

The Numbers.

So how did we go, Jenny and John are currently paying $1,043 per fortnight on the current $400,000 home loan and $184 per fortnight on the current 20k car loan. The new home loan is $420,000 at an interest rate of 3.85%, so we are going to set this $420,000 loan up with repayments of $1,113 per fortnight (ie $929 + $184).

This new loan term will be 20 years with the exact same repayments as before the refinance and consolidation. In addition to this the interest saving over the loan term is around $42,500, not bad right. This repayment amount and loan term could be adjusted to meet the clients cash-flow requirements depending on their budget and level of comfort in paying the home loan down, however the ideal outcome would be to increase the regular repayments slightly. As an example they could easily reduce the loan term to just 15 years by paying $328 per fortnight more than their current level of repayments (saving almost $100,000 in interest cost over the term of the loan.)

"This new loan term will be 20 years with the exact same repayments as before the refinance and consolidation. In addition to this the interest saving over the loan term is around $42,500, not bad right. "

The refinance process takes around 3 weeks to settlement. When the new home loan is settled we can setup the offset accounts as these will save further interest with every dollar in each offset saving the day it is deposited into your account.

The combinations of these and a continuous check that everything is humming along will get you, like Jenny and John, on the road to being in total control of your money.

Need help or have any questions?

Contact Us any time or visit Focus Property Wealth Website or call Glenn directly on 0433 212 444

About the Author - Glenn Biggins is the founder and director of Focus Property Wealth, a finance and property investment advisory firm with a focus on their clients goals and objectives. Glenn is an active property investor himself and has been investing in property through a number of property cycles; he currently owns a portfolio of properties throughout Perth as well as in other states in Australia.

Disclaimer

The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice. This needs to have regards to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

The post Home loan savings to pay your home loan off….FAST. appeared first on Focus Property Wealth - Perth Mortgage Broker.

Is it time to refinance?

Focus Property Wealth — Tue, 12 Jul 2016 06:37:02 +0000

Refinancing gives a homeowner access to a new mortgage replacing their existing one. The new mortgage may have a different mortgage rate, loan length and amount borrowed which in turn can reduce the monthly mortgage payment, make cash available to use for renovations for example among other things. is it time to Refinance?

Your needs today may not be the same as when you first took out your mortgage. So how do you know it’s a great time to refinance? Here are some factors to consider when looking at refinancing:

1. Bringing all your debts together

You can refinance more than just your mortgage. Bringing all of your debts such as credit cards and car loans together could reduce your monthly fees and streamline your repayments. You’ll have one lump sum leaving your account each month making budgeting easier to manage.

2. Fees (and hidden costs)

It’s important to calculate the cost of refinancing as it may not be an option once you add up all the fees and costs. For example some banks have a good front line rate but lots of fees or restriction on the use of the loan resulting in higher costs overall. Regardless of how appealing a low interest rate can be, it's important to work out what other costs may apply when switching lenders such as discharge and application fees.

3. Improving credit history

Refinancing in some situations can assist in improving your credit score but it’s important to note by refinancing, lenders will be accessing your credit file and running a credit report.

In a normal refinancing case, you most likely won't see a big difference in your credit health, but don't be surprised if your new loan results in some minimal changes. Ensure you keep a check of your credit file to ensure all the details are correct.

Here at Focus Wealth we can assist you to improve and protect your credit history and how changes to your credit file are recorded and can affect how you are viewed by a bank.

5. Cash out or cash in?

In a cash out refinance, the refinance mortgage may feature a lower mortgage rate than the original home loan; to provide cash for home improvements or if your financial situation has changed that you need some extra cash.
With a cash in refinance, a homeowner brings cash in order to pay down the loan balance and the amount owed to the bank. By doing so you may get access to lower mortgage rates which are only available at lower loan-to-values.

You may also be in a position to use the equity of an existing property. Here at Focus Property Wealth we can show you how to structure correctly and educate on ways to structure to meet your goals faster.

Is it time for you to refinance?

If you don’t know where to start and think refinancing is time consuming, that’s where we can help!

Click here to see how!

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