Mortgage Broker Casuarina
Davies Home Loans can help with loans for almost any Australian Property but we like to focus on the QLD Gold Coast and NSW Northern Rivers areas. Sometimes a story about a particular suburb and particular person can help people understand what makes us different.
We know that things change and certain events can trigger the desire to downgrade your home. This is where our Mortgage Broker Casuarina can help. Perhaps the kids have left home, you are tired of cleaning and maintaining a large property or you just want to access some equity. Whatever your reasons we encourage you to talk with us early in the process, just in case there are things you haven’t thought of that can impact on your plans. To demonstrate this we believe it is easier with an example (names have been changed for privacy reasons).
Jack and Jill had a large home in Casuarina (NSW), the kids had left home and they planned to retire and travel. Their plan was to sell their current home and buy into a quality unit development nearby which would have lower maintenance and also had inbuilt security to give them peace of mind when they travelled. They had a loan on the house and after selling would have a smaller loan on the unit. Fortunately the Real Estate agent selling the unit passed our card to them and they called our mortgage broker Casuarina as a ‘just in case’ option, particularly as consultations with our mortgage broker Casuarina are free.
Jack and Jill planned to payout their old loan on selling their home and get a new loan for the unit with a different lower rate lender. On the surface this looks good to change to a more competitive bank, But what they didn’t realise was that as their current loan was on a fixed rate, there was going to be a “break” cost of $7,600. Discussions with Jack and Jill revealed that once settled in the new unit, they planned to get a new loan to travel for a year at which time Jack’s superannuation would be available to payout all loans.
Most banks allow for loans to be portable between properties (with certain rules). By transferring the house loan over to the unit, Jack and Jill avoid “breaking” the fixed rate loan agreement and avoid the $7,600 cost. Our mortgage broker Casuarina recommended staying with the current lender and moving the loan. Although the loan is bigger than they want, as they planned to get a travel loan in the near future, they can keep the surplus funds from selling the home and put them into the loan as redraw able funds (hence reducing the interest cost). When they are ready to travel they can just redraw the surplus avoiding loan applications fees of approx. $600. Our mortgage broker Casuarina also suggested that when Jack’s super becomes available, they can reassess the break cost and decide if it is worth paying out the loan or wait until the fixed period ends where there would be no break cost. In Jack and Jill’s case, their fixed rate had 19 months to go which suited the overall plan.
The big saving was the break cost of $7,600 with a small additional saving of $600 for the travel loan application fee, a total of $8,200. Hidden in the background is avoiding the cost of changing lenders, with discharge, application, settlement and land titles mortgage registration fees typically being another $1,000. Even when considering the savings of changing lenders for a year, Jack and Jill were well in front by following this plan and quite thankful that they took the agents advice and called our mortgage broker Casuarina.