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The key to your next property
So you’ve done your research and you're looking to invest. You know the hottest suburbs on the market and your looking to invest but you don’t have a whole lot of cash to play with. If you’re a first time investor, you probably don’t realise you can purchase an investment property without a deposit. The team at Pinnacle Finance can show you how to unlock the equity in your home, and make your money work for you.
Alternatively, if you don’t have a deposit, but don’t want to touch the equity in your home, consider a Deposit Bond. If you’re buying off the plan, this is ideal. A Deposit Bond is a guarantee that is used as a substitute for the 10% cash deposit you are required to pay up front when purchasing a property. By using a Deposit Bond you won’t have to withdraw money from other savings or investments or draw equity from other properties. On settlement of the property, the borrower is required to pay the full purchase price including the deposit. To learn more about Deposit Bonds contact us today.
Interest only for a 5 years
Like most investors you can choose to either have principal and Interest repayments or Interest only repayments. Many financial planners and advisors always advise clients to reduce their non dedcualble debt first ie: ( own home loan ) before trying to repay back deductible debt: i.e.: Investment loan, meaning that you should keep your investment loan as Interest only and make any additional repayments into your own home loan.
EG:
On a $400,000 loan at 6.50% the monthly repayments on a principal and interest loan are $2,528-, and on an interest only loan they are $2,166- saving $362- per month. Remember that if you choose an interest only loan you will not be paying off the principal off your loan which is why extra repayment should be channeled towards your own home loan.
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