OVER the last 18 to 24 months , the banks have made a lot of lending policy changes to meet the regulators requirement . |
In doing so , banks have also used interest rates to control the volume of type of business they generate .
Regulators have made banks slow down the number of investment lending and interest only loans being written and , as a result , banks have used the method of increasing interest rates to slow or deter consumers from applying for those type of loans with them .
However , in recent times some of the banks have been able to turn on the tap and have started to offer some good rates within the same space they previously tried to run away from .
At the same time , banks are heavily competing for owner occupied loans and as a result banks are offering some really low rates out there as low as 3.59 %.
Therefore , if you have a home loan and you have not reviewed your loan over the
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By JERONE BALAGTAS |
Mortgage Broker |
last 18 months , now is a good time to do so .
There are also other reasons as to why you should review your home loan today : BUYING SOMETHING NEW AND EXPENSIVE
You may need additional money for a renovation , new car or family holiday .
Life events or purchases involving considerable cash outlay are a great time to review your home loan .
Refinancing can save you money that you can then use towards the cost of these large expenses , particularly if you are willing to maintain your current re-payments or chose a shorter loan term for the additional cash .
The advantage is home loan rates are cheaper than a car loan or a personal loan . INVESTING IN PROPERTY
WHEN you purchase an investment property your existing loan arrangements should be reviewed .
Loan structures to maximise tax
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deductions should be put in place and funds flow should be directed to reduce interest payable on your principal place of residence and not your investment loan .
It is also a good time to review your loan and raise your equity during times when you property is valued high .
By taking the equity at that point and waiting for the market to slow or plateau then you are maximising the equity you can use to reinvest .
The property market is now starting to slow down and slide back so now is a good time to take the equity out and then buy an investment in a couple months time or next year once the market has bottomed . WANT TO PAY DOWN YOUR HOME LOAN FASTER
Your current rate may not be as attractive as the one you originally signed up for .
The market has become much more competitive and you would be surprised what rates are out there when compared to your rate . YOUR PERSONAL CIRCUMSTANCES CHANGED
When you sign up for a home loan , qualification for each lender depends on
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your circumstances at that point in time .
Hence choice of lenders may have been limited so if you now have a higher paying job , less short term debt or are now on two incomes , your choice of lender and the number of products available may be more diverse .
The value of your property may have increased and you may now also qualify for a cheaper rate .
There are a lot of reasons as to why your circumstances now may dictate a lower home loan rate . LOTS OF SHORT TERM DEBT
If you have personal loans or credit cards , it can often make sense to consolidate these debts into your home loan .
The savings on your current home loan along with the reduced interest on your short term debts can contribute to paying down the debt faster , particularly if you can afford to maintain your current level of repayments . •
Jerone is a local successful Filipino mortgage broker and one of the Executive
Director of the One Solutions group , he has 16 years experience in the accounting / finance / banking industry . He walks the talk as he is a successful avid property investor himself .
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