Reduction & Minimisation Strategies

Option 1:

You may have seen it on the television, heard about it on the radio or read about it in the newspaper. The term is mortgage reduction or minimisation strategies. This is a strategy which helps you own your own home much, much faster than the traditional bank home loan. Of course you want to find out more, but where and who can you ask. Finally a lender that will help you Lower interest rates and keep them low complimented with strategy’s to reduce interest payable and cut the years off your home loan. This proves to be a money saving system that thousands are adopting, but they have forgotten to tell you one more thing.

The tax effectiveness. For the smart property investor this is all common knowledge. But what about you the beginner that needs to learn how. Redilend® can help. We will show you how to implement savings measures & how to acquire equity from your current home to start an investment portfolio. There are many different ways to help you pay off your mortgage sooner, this is just a tease.

e.g. A mortgate of 250k would normaly take 30 years to pay off. However we can show you how to pay off your mortgage sooner by injecting and aditional $100 per week could save you $180,000.00 in interest & 12 years off your mortgage term. We call it the "Redilend Simple Saver".

Reduction & Minimisation Strategies

Option 2:

A traditional loan is paid either monthly, fortnightly or weekly. The term of the loan can be reduced by paying fortnightly or weekly due to one extra monthly repayment on the loan per annum. The term is also reduced due to interest being calculated on a daily balance, and since the repayments are reaching the loan faster than once a month, the interest charged on the loan is less, and therefore your loan term is reduced. A new loan product called the Line of Credit has now been introduced to the market. A line of credit is simply a home loan with a borrowing limit which can be re-used if you pay all or part of it off. In other words, it is like an overdraft or huge credit card with a home loan interest rate. The Line of Credit can be arranged to purchase a new property, business or investment or simply refinance existing loans. The Line of Credit is a facility where you can pay in as much as you like, and withdraw as much as you like (provided you do not exceed the line of credit limit). In other works, your money can come and go as you please. Interest on the Line of Credit is calculated on a daily balance, therefore, if you have a lump sum or excess cash which can be parked in the loan, you will reduce both your interest and term of your loan.

The above graph represents the effect of the Mortgage Minimisation Strategy. Remember that at any stage throughout the process, you have access to the equity in your Line of Credit. Therefore at year seven, you could draw a cheque for $100,000 and buy another property outright, you will never have to apply for another loan again.

This is great but it can be even more effective. By placing all of your income into the Line of Credit, and placing your living expenses on a credit card (55 days interest free credit card) you can reduce the term of your loan dramatically. The goods and services which you purchase at the beginning of each month are not really paid for until the end of that month. Therefore, money has been sitting in your home loan, reducing your interest and reducing the term of your loan (After all it's your money, why not use it to your advantage). At the end of each month, an automatic transfer occurs from your Line of Credit to your credit card thereby ensuring that you never pay interest on you credit card. Should you need cash, it can be withdrawn by cheque or ATM card directly from you line of credit as you would do with a normal bank account. The left graph represents the effect of the Mortgage Minimisation Strategy. Remember that at any stage throughout the process, you have access to the equity in your Line of Credit. Therefore at year seven, you could draw a cheque for $100,000 and buy another property outright, you will never have to apply for another loan again. The savings are masive!

To find out more on how we could help you to acheive this feel free to call one of our friendly staff on 1300 85 45 75 for an obligation free discussion. Its easy, its simple and it will save you thousands. That is why we call it our Simple Saver Home Loan. Look forward to hearing from you.