Now this might not sound like the most exciting of topics but it could save you some serious money, and just think of all the fun things you could do with that.
People who have owned property for 1 or more years would almost certainly have realised some equity.
The market has shifted enough that it has allowed people the ability to use this equity to invest, complete renovations, or any number of various other purchases.
What we are finding more common is the ability to refinance and consolidate debt. By doing so, you could reduce the interest and repayments across all types of loans, if structured correctly.
One example we had recently was a client who had number of loans and credit card debt which had built up over time, and their situation was as follows (please note, exact details not used for privacy reasons);
Type of loan Balance Monthly Repayment
Credit Card $10,600 $533
Credit Card $20,000 $491
Personal Loan $9545 $510
Home Loan $390,000 $2,190
Total $430,000 $3,724
We were able to refinance this clients loans to a more competitive rate, and the repayments reduce to $2,200 overall – a saving of more than $1,500 per month!
Whilst this is an impressive amount to save, it is very important to note that the repayments of the cards and personal loans are over the same term as the mortgage (30 years) so consolidating debt might not always be the best option.
In our clients case, they were looking to do some investing in property, and therefore cash flow in the short term was important. In addition to this, the interest rate on the home loan is much lower than the credit cards and personal loan, and a plan was made around reducing the new home loan as quickly as possible.
If you are interested in finding out if this could apply to your financial situation, get in touch today and we can work together to decide whether debt consolidating is an appropriate step for you.