Time to Renegotiate or Refinance
The last 12 months have seen Rising House Prices, and you may not realise but what that means is your Loan to Value Ratio or LVR may have dropped, and so should your interest rate. So now is the Time to Renegotiate or Refinance
At Awesome Lending We often talk about the 4C’s of Credit and how they are you path to wealth creation through property.
That’s because these 4C’s are how the lenders and Banks determine you risk profile to them and weather they will lend to you and how good the rate might be. The better your credit worthiness the better the interest rate.
At Awesome Lending we understand that the recent rate rises have been hurting everyone and the shortage of properties both for sale and to rent is making things tough. The interest rate rises, and property prices rise have seen many good people simply priced out of the market.
The silver lining for existing homeowners is the value of their property has gone up. And with it the Loan to value Ratio has gone done
Loan to Valuation Ratio (LVR) is the percentage of the total value of the property or asset that you’ve borrowed. To work out your LVR, take the amount you plan to borrow or your current loan amount and divide it by the price of your asset. This figure is your LVR.
No as this ratio goes down so does your risk to the Lender or Bank and so should your interest rate.
This of it this way if your LVR is 95% then if the bank forecloses there is a very big risk that they may not get all their money back. Especially if the value of properties suddenly dropped. That because there is only a 5% buffer against the difference between the price and the loan.
Now consider your properties gone up in value and you have been paying your loan off, so your LVR is now 60%. Now the Bank has a 40% buffer against the difference between the price and the loan. That’s a lot less risk for them.
So, for example we have one lender who has a difference of 1.1% between their highest interest rate and lowest interest rate, simply based on LVR.
How Awesome can help.
Free Property Reports
This allows us to work out the value of the property for you and based on your loan amount your final LVR.
We negotiate with your current bank for you.
For our existing client we use a great service that automatically email lenders every 6 months with the property value, loan amount and the current lender “Best Advertised Rate” so ensure your rate is the most competitive available.
For New Awesome Clients we manually contact your bank or lender for you armed with your valuation, loan amount and their “Best Advertised Rate” to negotiate the lowest rate possible without you needing to be involved.
We compare the pair.
If we still don’t get a great response, we look around and compare over 40 home loan lenders and their products to find one that might be a better fit for you.
And it’s all free. We do not charge for our services.
We’re available to help you, whenever you need us.
Finally, rest assured that we’re available and here to help you any way we can.
Albert Waldron
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
