REFINANCING YOUR MORTGAGE TO BUILD YOUR FINANCIAL PORTFOLIO
- Written by Melanie Toye, March 24, 2013
Before commencing any financial journey, one of the best methods to discover all the information you need to know before making a decision, is doing the research first.
Below are some tips to help you not fear the words “refinancing” and “portfolio” in the same sentence.
- Think about what investment you would like to purchase, research costing, return on investment and expected life for the asset etc.
- Consider what options you may have in order to purchase the investment. In this step – gather all your required documentation and visit a Mortgage Lender. For real expert knowledge, contact our Mortgage Managers on 1300 799 266. Do not be afraid to seek out several opinions. This is a great way to find what track will best benefit you. It is also good to know how much you will be able to borrow, before you get your heart set on a particular investment.
- Then go back to your financials yourself and see if you are comfortable with the additional loan amount you may have to pay. Will the extra expenses lower the amount of your regular savings? Will the income earned from the investment pay for the expenses related to it, resulting in little additional monies to be supplied by you?
Refinancing does not have to be scary and it is actually recommended for everyone to review their mortgages annually to ensure they are getting the best deal. It can be hard to find extra cash to put aside for an investment. Refinancing a mortgage to receive a lower interest rate can free up some of your cash. It is up to you, what you want to use your new found money for. It could be to buy shares and possibly use the dividend earnings to pay back into your mortgage. You could add it to your mortgage offset account, if the interest rate is higher than a standard savings account, ensuring the mortgage has a redraw facility. This is a great way to lower your interest over the period of your mortgage.
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