Home Loans for Professionals

02/11/2022

Can you Save Money with Fortnightly Loan Repayments?

It's just math, plain and simple.
I'll do my best to explain it in plain English.

A majority of loans calculate interest on the balance
on a daily basis and credit it to your account every month.

So by default a lot of loans have the repayments set to monthly.

⛔⛔This relates to principle & interest loans, not interest only loan.⛔⛔

A lot of lenders will let you make loan repayments fortnightly
and just halve your monthly repayments. So you still pay the
same amount each month but it has been split in half.

Here comes the magic. 👀

12 months in a year

If you halved your repayment and made loan repayments fortnightly
you'd expect to make 24 loan repayments.

26 fortnights per year.

Not all the months have the same about of days, so we have
26 fortnights per year not 24 as you'd expect if we cut a month in half.

So if we have 26 fortnights that means you make 2 more repayments over the year.

26 repayments not 24 repayments.

Or if we think of it back in terms of months, you make 13 monthly
repayments over the year, not 12 repayments.

The extra repayments lower the loan balance, reducing the interest that is calculated on a daily basis and reducing the loan term.

To see how you may benefit from fortnightly payments, find an online loan calculator and insert your figures and see if you benefit from this simple loan feature.

01/11/2022

26/10/2022

What is an easement on a property?

An easement is a legal right to use another's land for a specific limited purpose. In other words, when someone is granted an easement, he is granted the legal right to use the property, but the legal title to the land itself remains with the owner of the land.

Examples of easements include the use of private roads, paths, driveways or the use of a landowner's property to lay railroad tracks or electrical wires.

19/10/2022

Tenants In Common v's Joint Tenancy

Whats the difference and which one is right for you when you are
buying a house.

⚫ Tenants In Common:
Tenants in common of an item of property may own equal or unequal shares, sometimes expressed in percentages.

Each tenant in common may sell his share to another.

With tenants in common where a property owner dies, his/her share goes to their estate (Will).

⚫ Joint Tenancy:
When two or more persons are equally owners of some property.

With joint tenants where a property owner dies, his/her share goes to the surviving joint tenants until there is but a single survivor, at which time the sole survivor owns the whole.

⚫ Which one suits you best:
If you want clarification on these terms prior to buying a house, seek out a legal team you'd like to use to handle the convayancing of the property purchase.

Set up a meeting prior to going house hunting and get some clarification on which structure suits your needs.

It is cheaper to get it right the first time.

12/10/2022

How does home loan redraw work?

A redraw facilities is a feature of certain types of home loans and personal loans which allows account-holders to withdraw the extra payments they have contributed over and above their minimum scheduled repayments.

⚫ Advantages:
The extra money you have been contributing into you loan assists in reducing the balance. As a majority of loans calculate your interest on a daily basis and credit it to your loan monthly, reducing the daily balance helps reduce the interest you pay and reducing the term of the loan.

The idea is the extra money paid into your loan will provide you a larger
benefit then the interest you are able to achieve in a savings account.

⚫ Disadvantages:
You should be aware of the disadvantages like fees and withdrawal restrictions tied to each redraw, as well as limits to how many redraws you can conduct per year. So be aware that the money that you pay into a redraw facility ideally shouldn’t be money that you need in a few weeks time.

Another disadvantage is the lender may change their policy around redraw.
A home loan could be taken over a 30 year term, you have to expect that
there will be some changes over that length of time.

⚫ Misconception:
A misconception is that you can redraw your loan back up to the original balance which is not the case.

An easier way to wrap your head around the idea is if you imaging you
have been making extra repayments as you rounded up your repayments
at the start of the loan to pay a little extra.

Over some time you find you have paid an extra $1,000 and ahead of your
scheduled minimum repayments.

It is that $1,000 that you are requesting to redraw from the loan.