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Q: I own my own home outright worth around $400,000
I also have an investment property worth around 300,00 on which I owe $232,000 and paying 5.6%
I want to refinance to get a better rate but not getting any joy with lenders.
I earn $35,000 p/a and have a rental income of $150.00 p/w
Where should I be looking?
A: Hi Anna
Sounds like you should be able to refinance here, based on face value of what you’ve advised. 5.6% is quite high.
I would suggest getting in touch with a broker, such as myself and we can drill down a bit deeper to find where there stumbling block may be, and find a solution. That does seem to be quite a low yield on the property, though. Is it NRAS or something?
Happy to have a chat.
Ben @ Aussie Unley
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Q: For the loan to purchase our home we borrowed about 90% and had to pay mortgage insurance. If we refinance does it mean we have to pay it again?
A: Hi Mark
If you refinance to another lender and your debt level is above 80% of that banks valuation of your property, then yes - you will.
If you refinance and the debt is under that 80% mark, there will be no LMI implications.
It's worthwhile noting that on occasion, topping up your loan to access any equity may be best to do with the existing provider, as you should get some rebate on the LMI already paid. Subject to, initial LVR, new LVR and original and new LMI premiums.
Hope this helps.
Ben Slater
Aussie Unley
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Q: I would like to get some advice on buying my first home … savings around $50,000 with a full time job as a teacher. I have been looking at properties around $375 – 400,000 and want to know if could buy a property on my own with the money saved or will I need a guarantor?
A: Hi Jake
Quite simply, in terms of funds to complete, you have at least the minimum, which is terrific.
However, when borrowing over 80% of the value of the property you will be subject to lenders mortgage insurance, which is a bank charge and capped on top of your loan.
If a guarantor is available, this could be a better alternative, as it would remove the lenders mortgage insurance charge.
Is probably best discussed further.
Give me a call if you'd like to!
Ben Slater
Aussie Unley
*** ****
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Q: We are looking at a new loan and want to know what the difference is between redraw and offset account. Does interest rate change if we did have the offset?
A: Hi Drew
Ben from Aussie Unley here.
Essentially they do the same thing. Additional money paid into either an attached offset account, or into the loan itself will reduce interest charged by the lender, calculated daily and charged monthly.
Typically (but not always) there are fees to have an offset account. These range from monthly fees of $5 or $10 a month, through to $395 per annum for professional package type loans.
Redraw is a clunkier way of using the additional additional cash to reduce interest. With an offset, while there are fees, they are must more versatile and transactional. Whereas, redraw must be drawn into an account to then be used rather than be able to be used directly from an offset account.
In all - both reduce interest. More freedom with an offset, but have fees attached. The fees are usually justified if your personal banking habits are more complex.
Usually all products with an offset, will also have redraw.
But, some products without the offset account can attract cheaper rates.
Best to chat with a broker and look at the best option to suit you, factoring rate fees and charges.
Ben Slater
Aussie Unley
08 8271 2001
