In the last several years, the strict rules that are in-placed for the private home property buying and selling industry have created few reorganisation in how the banks have been applying their rates to home loans that are being process. At the moment “Interest Only” home loan rates have gone up, while ‘Principal and Interest’ type of loans have relatively gone down.
In a lot of situations, these changes have diverted the customer attention towards Principal and Interest loans, as it will help them to pay their balances easier, due to these incentives that were put up.
With these new changes with conjunction to the discounted rates of the new “Principal and Interest loans”, It is now a good time to re-think about your current loan options.
The great message here is really good, the house that is where the buyer also lives will not be overburdened. It is now possible for your current investment debt to be refinanced from your house that is buyer occupied while savouring the rates of the house that is owner occupied, which is at the moment very low as far as we can remember.
What is the Cost to Refinance a Mortgage? There are so many Loan Deals out there. Cash Back or Cash Out Refinance with different Offers & Options. We might be able to get you the Best & Cheapest Refinance Mortgage & Investment Loan Rates. Personal Loans? Did you ever had the chance to look at and re-evaluate your current Investment Loan Rates? Call me today on 0418 903 528 for a Free Assessment.
More Information about how to Refinance your Investment loan
What are the eligibility to refinance an investment loan?
If you want to refinance an investment loan, then you need to owe less than 80% of the property value. You should be on a variable interest rate, if you want to refinance at any time. If you want to choose a fixed interest rate then you have to recoup the amount of early exit fees within two years.
Process of accessing another equity to buy another investment property
If you want to learn the process of accessing another equity to buy investment property, you need to follow these steps given below:
80% property value of your current investment property can be taken as a lend.
But before doing this you need to provide two important things which are-
1. A letter from the conveyer.
2. Copy of the contact of sale documents.
How much equity can you release?
As a professional property investor, you can release as much as equity you want to release. To do so, they put all the funds into an offset account when the interests decreases to the lowest.
But banks are thinking about tighten their securities on the equity policy so that the real estate market can take the downswing in a medium rate.
Purpose of your offset account
The first and primary reason of an offset account is to get easy access to the equity and you can have them whenever you want to have.
As an example we can say that, in order to maximize the capital position, you can choose extra mortgage repayments. It will give you the opportunity to take advantage from other’s investment.
An offset account divides into two stages. One is loan facility and the other one is deposit account.
If you want to avoid taxes, then you should better stay away from most of the unused funds which can come from refinancing into the deposition account.
This is why you won’t able to ask for a tax deduction on payments or an investment loan.
System of choosing fixed or variable rate?
It is not a good idea to choose the system of interest rate. But if you want to choose it you need to take acre of these certain thing:
You better have to create extra payments on your investment loan, if you want to hold your capital position.
If you are deciding to sell the property in recent years then you can choose an interest rate. You need to find out the current refinance interest rates.
Interest only payment
If you are currently making internet only payment, then you are well aware of this process. But if you are not well aware of these thing then you can learn about it below:
1. Market and your marketing strategy decide this process.
2. In order to maintain a stable flow of cash we should certainly choose an interest only term and get our own offset account where the rates of variable are lower than the fixed ones.
3. You will gain an incredible benefits in capital management through interest only payment. In order to growing property portfolio, you can use this method to get funds for renovation.
4. Whatever, if you decided to be in a safer and significance position in a very short time, you should definitely choose interest only payment over anything in the world.
5. It will be helpful for you to consult a professional to learn more about this topic and set a goal for yourself.
Process of refinancing an investment loan
There are a lot of ways and processes to refinance an investment loan. These are given below:
You need to set up the home loan in the first place, then you need to give the loan application form cost.
You also need to pay the exit fee. You either can pay it or can negotiate it to give later.
There must be a settlement fee set for your past mortgage and you should also set up a discharge cost.
You also need to pay break costs, if it is under the contract.
Lenders Mortgage Insurance (LMI) will need to be paid if you refinance over 80% of the value of the property.
It will be applicable for other fees.
Cross securities or release equity- what will you choose?
If you choose release equity and can save yourself from having huge blows in some market downturn.
You will be able to protect your home from the bank. Otherwise they will force you to sell your home.
Buying your first home or Reinvestment- what will you do?
If you’re renting and the owner of a rental property right now, you can be considering whether to gain the accessibility of the equity to get another investment or to buy your first home.
It usually based on the importance of your choice. What will be more important to you – your financial goals or your lifestyle goals?
What about tax deduction on an investment loan?
First of all you need to pay all the upfront application costs, the ongoing loan fees, and an exit or discharge fees if it is applied when you are switching to your new loan.
Because of the higher fees, it can be a goldmine for negative gearing for the ongoing expenses.
Honestly speaking, you can ask for the first five years of these property ownership expenses right in that moment.
Process of turning your home into an investment property
By bringing the equity in your house, the amount in the offset account will decrease, and you will be able to claim a tax deduction on the interest of the new loan balance.
The whole thing discussed above is just a general information only. You shouldn’t be considered them as tax advice.
It’s very important that you speak to an accountant or an expert or a property tax specialist to learn more on this topic.