Refinancing Could Save You $10,000s in Interest and Tax
It’s often said that Doctors are more likely to divorce their spouse than switch banks.
But with plenty of competition in the home and investment property loan sector, refinancing can be a good move.
Why bother?
There are a number of reasons why you might want to refinance.
You could:
Save on your repayments by moving to a loan with a lower interest rate,
Restructure your loans to make them more tax effective,
Release cash from your home and investment properties for investment or other purposes,
Consolidate higher interest rate debts into a loan with a lower rate of interest.
What’s my rate?
If you aren’t 100% sure exactly much you’re paying, how can you find a better deal?
Luckily, finding out your interest rate can be as simple as logging on to your online banking and checking the account information for your loans.
What do I need?
Make a shopping list of the features you want in a new loan. These might include:
Variable rate or fixed rate:
A fixed rate gives you more certainty over the longer term;
A variable rate can save you money when the market is down, but it fluctuates with the market and in the past has been as high as 18 per cent.
Offset account: surplus cash can be offset against your loan balance until you need to spend it, potentially saving you interest.
Line of credit: if you have a lot of equity in your house, a lender might be prepared to offer you a useful (and cheap) line of credit secured against the property.
Repayment flexibility: repaying a loan fortnightly rather than monthly can save thousands. There are 26 fortnights in a year, but only 12 (not 13) calendar months, so you pay the principal off quicker (and therefore pay less interest) when you make fortnightly repayments.
Ability to pay the loan out early with minimal penalty.
What’s on offer?
A good broker will be able to help you choose the type of loan you want, how much you want to borrow and what extra features you need. They can then help you compare loans from many different lenders, with information on interest rates and fees and charges. This can help you weigh up the costs and benefits of each loan.
They’ll do all the legwork for you, providing you with a list of solutions that cater to your particular financial needs, getting rid of any confusion and hassles throughout the process.
Check out the costs of getting out – and getting in
If you took out your loan before 30 June 2011, the lender might be able to charge you an exit fee for terminating early. And if you’re on a fixed rate mortgage, you might have to pay a break fee.
There may also be establishment fees for the new mortgages you’re considering, and you may find yourself paying higher ongoing fees, sometimes called administration fees. Some lenders also charge a fee each time you redraw on your loan.
The best thing to do is speak with your broker, as they’ll be able to advise you of any and all fees that are involved.
Do the maths
The Doctors Wealth Mortgage Broker can help you assess the cost of switching your mortgage.
Compare the fees and charges, too – these can add up, and may offset any interest rate savings over the life of the loan.
Speaking to a broker provides a clear advantage
At the end of the day, a good mortgage broker with specialist knowledge of lending for Doctors is able to guide you through the entire refinancing process, from start to finish.
They have in-depth knowledge and understanding of mortgages, and will help you get the best possible outcome and make this as easy as possible for you.
What should Doctors do?
The first step is the same, whether you already have loans in place, you need a new loan or would like to increase your lending.
This first step is to contact us and arrange a complimentary check of your current situation. We will check to competitiveness of your current loans including both the structure and interest rates – to decide if it is the best possible deal for you.
Reviews can be done very quickly, and all it takes is a quick phone call or email to us. We will take care of the rest.
The Doctors Wealth Mortgage Broker can assist you:
• Access the best lending offers from over 30 lenders including special lending offers for Doctors,
• Negotiate the best interest rates on your behalf,
• Structure your loan best for tax purposes, and
• Make it as easy as possible to set up your new loan or refinance your existing loan to save you time, money and headaches.
Please contact us at(07) 3252 8810 or info@doctorswealth.com.au if you would like a complimentary review of your home or investment property loan, or discuss any other financial areas of interest to you.