Hi,
I am currently looking at refinancing my loans and would like to know what other people would do in my situation. I currently have 2 loans with the same bank (Bankwest) the first for $183,000 and the second for $86,000. Both were valued by the bank a few months ago for $207,000 and $81,000 respectively. They also valued a block of land that I own outright at $50,000 as they are holding this as security too.
Both properties are currently being leased out, but as the larger one used to be my PPOR it is still a principal and interest loan with a variable interst rate (currently 7.65%). The smaller loan is 5 years interest only then becomes the same, however I am still able to make additional payments if I wish.
I am thinking of making the larger loan interst only at a fixed rate for 3-5 years, maybe with a different lender as there will be fees either way. Ultimately my goal is to continue buying more investment properties, but as my LVR is currently almost 80% I thought if I refinance this way I can conentrate on reducing the smaller loan as quickly as possible to build my equity.
Would anyone agree with doing this, or has any other suggestions on what they would do?
Thanks for your help!
Hi there,
Are you wanting to refinance these loans to purchase property in the near future, or are you simply looking to refinance to improve the structure of your loans so that you are set to go ahead in a year or two?
Lia
Hi Lia,
I am looking to improve the structure of my loans so I can purchase another investment proprty in about a year. I have been considering changing my loan of $183,000 that is currently P&I to be IO. I have enquired with Bankwest who the loan is through and it will cost me a $350 one off fee and $12 p/m account fee to have it fixed at 7.99% for 5 years. At the moment it is a variable interest rate at 7.65% currently with no other fees. As it is now an investment property I wonder if this would be a better option and to concentrate on reducing the principal on my loan of $86,000. I have also spoken to another bank who has suggested combining both loans and refinancing with them. Of course I could just leave everything as is as well and avoid any fees if it is not worth refinancing? Any ideas please, open to any suggestions?
Thanks!
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