5 simple steps you need to know to save thousands on your ... · 5 simple steps you need to know to...

5 Simple Steps You NEED To Know

To Save Thousands On Your Mortgage

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WITH AN EXPERT

Please note – this book is general in nature and is provided for entertainment purposes only and does not take

into account your circumstances or various outcomes you wish to accomplish. To get advice which considers

your personal circumstances and the outcomes you are looking to achieve, please book a consultation.

1: It pays to think smart: make your loan

work for you

✓ Generally speaking Principal & Interest is the best type of

repayment structure to minimise interest and maximise wealth

creation.

✓ This is because, the quicker the principal is paid off, the less

interest is payable over the life of the loan.

✓ Putting additional money towards your mortgage will reduce the

interest you pay in both the short and the long term and could

translate into tens of thousands over the term of the loan.

EXCEPTION:

✓ If you own an investment property and a home that you live it, there

may be a tax advantage to paying down the non-deductible loan first.

However, your accountant will be able to talk through these options

with you.

The simple trick could take 3 years off a standard 30 year term:

Simply contact your lender and reset your repayment so that half of

your monthly repayment goes out every fortnight.

The reason this strategy works is that there are 26 fortnights but

only 12 months in a year. This means every year your making an

additional extra months repayment on autopilot.

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2: Refinance existing debt

Should I Consolidate My Debt?

✓ Debt consolidation can be a great option if you’re struggling to

manage several debts on credits cards, personal loans or car

loans.

✓ The way it works is you consolidate many high interest loans onto

your mortgage. This can massively reduce monthly repayments

and convert high interest debt into low interest debt. For instance

it’s possible to move credit card debt from a rate of 19.99% to

rates of less than 3% when included with your home loan.

✓ If you’re in a position at the moment where your trapped in a cycle

where you’re only able to pay the interest component and are not

paying down the balance of the debt, it’s a good sign that this

could be worth looking into further to break the cycle and lower

your monthly repayments/interest being paid.

✓ If you have a fixed loan, there may be break fees so have a chat

with your broker so they can help you work through options.

✓ We specialise in debt consolidation and refinance options, so

book an appointment if you believe this would be of value to you.

What If I Can’t Refinance?

✓ Some credit card companies provide what is called a “credit card

balance transfer”, where the interest rate you’ll pay for the

balance transfer period is lower than what your currently paying

which may provide an opportunity to start repaying the loan

principal. This is outside of scope of this book, but may be

worth researching if you aren’t able to refinance.




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3: Maximise Your Refinancing ROI (Return On Investment)

Take Advantage Of Cashbacks When There Available

✓ Minimise the time it takes to break-even and get ahead by taking

advantage of cashbacks when they are available.

✓ For example, at the time of writing there is a $4K cashback

available with one of the major lenders. This will mean your cash

flow positive as soon as you settle so you’re better off even before

interest is taken into account!

✓ Refinancing a loan generally costs between $700-$1,000 (a cost

that gets added to your loan, so that you don’t need to pay this up

front). So a better deal means a faster return on this investment.

Make The Lenders Compete And Offer The Lowest Possible Rate

✓ Another way to maximise the ROI on your time refinancing is to

make sure your getting the lowest possible rate that is available at

the time when refinancing.

✓ If you’ve got equity in your property, strong income and good

credit that should mean you’ve got more bargaining power as

generally all lenders want to minimise their risk by loaning money

to you.

✓ We typically make the banks compete against each other to make

sure our customers always get the best possible deal.

✓ Smart Refinance is not aligned to any particular lender -

Our mentality is – may the best loan win.




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4. Beware The “Secret Tax” That Can Cost

Tens of Thousands of Dollars For Average

Home-Owners.

✓ If you have 3+ separate credit related products with the same

lender i.e. home loan, credit cards, personal loans, car loans,

insurance etc. all with the same lender you could be falling

victim to what we joke should be called the ‘home loan

loyalty’ tax.

✓ The lenders know that customers with multiple products with

the same institution are less likely to switch.

✓ Therefore, there is little incentive to offer these customers the

best possible deal, knowing its unlikely that they will bother

to switch.

✓ What this means is that lower rates and thousands of dollars

in cash backs are offered to new customers, while existing

customers see none of this!

✓ As one of our plumbing clients said, if they went to a

customers house and charged $7,000 for fixing a leaky tap to

an existing customer and $700 to a new one, they wouldn’t be

able to get away with this. What is the difference?

✓ If you think you may be effected by this costly condition and

want to stop your lender from taking advantage of your

loyalty, book an appointment and we’ll work through what

your options could be.




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5. Not Being Aware Of Your Options

If you’ve made it this far you’ve potentially learnt information that

will save you thousands over the duration of your loan.

Ultimately, we can only make good decisions with the knowledge

and information we have in front of us. Like most things in life, with

enough time and energy it is possible to learn how to do just about

anything.

With enough time, motivation and a YouTube video many of us

would be able work out how to change the oil in the car.

But, all it takes is a small mistake like buying the wrong type of oil,

installing the filter incorrectly, or dropping the oil onto the drive

way and you wish that instead of all that muck around you’d gone

straight to the professional and got the job done right the first time

around.

It is the same with refinancing, by putting your loan in the hands of

a professional mortgage broking firm who specialise in refinancing

you’ll know what your options are and gain access to a team with a

wealth of knowledge, to help you make the best decision.

Thanks for reading.

James – Smart Refinance



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