Whether you're buying a home (new or old), refinancing, investing in property (personal or commercial), getting the right loan package for your needs is going to involve more math than most of us do in a month.
Dennis Terracini from Canberra's Go Forward With Purpose also explained to us that when finding the best outcome for each borrower there are other factors to consider as well.
The quoted interest rate should not be the only consideration as there are other important features to consider. Even so, at the moment people who fulfil all the necessary criterion could qualify for variable rates of 3.55%pa for owner-occupied and 3.87% for investment/construction loans.
"Utilising the services of a specialist broker can offer you various options and offers available through different banks, non- bank lenders or a combination of both," says Dennis.
"There are several factors that go into determining the financial capacity to service a loan and using Go Forward with Purpose can assist in getting approval with the right lender for a loan and an amount that suits you".
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Refinancing can also be done for a number of reasons and some of those are to help get you out of trouble.
For instance you might consider drawing upon your equity to make funds available to pay out high interest debts like credit cards and personal loans. Some lenders will allow payments for accumulated tax debts and provide cash out for business or investment purposes.
Dennis also gave the example of someone who drew on equity to keep their small business ticking over.
Sometimes drawing upon equity is done so that you can invest in alternatives other than property such as shares.
Whatever the situation, he says the best thing to do is sit down and have a chat to establish what your options are, and then he can help you select the best course of action for your circumstances and your long-term future plans.
Perhaps you're already doing great, your job is paying well, you have a nice home and an investment property, "but you need a review to ensure you are managing the home loan and investment loan in the most efficient way."
Some Handy Tips
"Since the findings of the Royal Commission lenders have an obligation to ask for the last three months of your personal bank account statements to ensure your living expenses and income are in accordance with what you declare." Business bank statements are also required.
"It is important that you maintain orderly personal bank accounts for personal expenses and income including personal investment expenses and income," and if you run a business, "it's important that you use separate accounts for the business expenses and income."
Don't get hung up on the term of a loan. You can pay it out early if you wish.
By "Understanding the use of offset accounts, redraw facilities and internet banking and using them to your advantage, the loan term can be reduced by several years."
Dennis also has Professional Membership of the Resolution Institute, so if your financial circumstances require mediation or negotiating with another party he can help with that too.