Browse Forums Home Finance 1 Oct 06, 2010 10:41 am Hi all, Im a first time home owner, been in my new build since March. My little car is on the way out so I have to get a loan for new one, I want 10 grand max. My current home loan is with keystart, the wa govt "bank" to get people into their own home. They have recently changed some policies so you are no longer able to refinance with them. They also have no exit fees at the moment, i think they want people out and with one of the big 4. Ive had a talk with my mortage broker and he has done all the sums and worked out I have 50 grand equity in my new place. I can refinance and get my 10 grand but it will cost me about 4- 5 grand in mortage lenders insurance for the new bank, anz. My broker is saying that i will have more flexibility with anz, as they have redraw. Dont know if they have offset accounts, but i dont really have extra money to pay in anyway. As a first home owner, arent i supposed to be trying to get my loan down, not increasing it? Does anyone have any advice? I know that interest rates are higher for car loans, but when you add the mortage lenders insurance plus anz fees (these appear to be more than keystart) is it really worth refinancing and adding 16 grand to my loan? any advice would be appreciated, being a female that has built on her own, im feeling a bit out of my depth here! Thanks, Shan Re: pros and cons of refinancing... help! 2Oct 06, 2010 11:14 am Hi Shan, I'm not a financial expert but have gone through all this recently. I'm open to other experts who may say I'm wrong but this is my opinion. It's really about your cashflow situation. If you can go to one of the car lease companies like BMW Finance or similar, they can work out what the repayments are for your $10K. A lease means you can have a residual. That means that you can tell them you want to pay $1000 as a lump sum at the end of the 5 years and they work out what the monthly repayments would be on $9,000. The repayments will be lower if you tell them you can afford a $2000 lump sum (residual) payment at the end of the 5 years. Then figure out whether that repayment is something you can afford to do. The interest rate will be higher than a house loan, but actually not by very much. It's about 10%, I think, at the moment. The alternative is to do what you're saying but as you've seen yourself, you're actually now taking out about $15K but you pay that off over 20 or 25 years which means a lot more in the long run. If you're right on the edge of your ability to pay stuff, then this may still be the only way you can do it because you'll probably only add $50-$100 onto your house payments but if you have just a little more room to move, then taking a lease with a residual may be the faster way to pay it off. As I said atthe beginning, it's just about your cashflow situation and if you can afford to pay a little more for a separate loan. Sorrry for being long winded. I hope this helped. SK Build thread: viewtopic.php?f=31&t=34120 Handover 23 Dec 11 Squatting 21 Dec 11 Fixed 12 Oct 11 Plastered 31 Aug 2011 Framed 7 June 2011 Site Start 7 Feb 2011 Land Titled 18 Jan 2010 Land Deposit 25 Jun 2009 Re: pros and cons of refinancing... help! 3Oct 07, 2010 9:29 am There is no way I would be paying 4-5k in LMI for an extra 10k. That's lunacy! And SK is correct that you will end up paying more interest if you add it to your home loan as you're then paying it off over 25 years. If you really have to get a car loan get a separate loan. Either arrange a personal loan through a bank or a lease through a car dealership. Standard uninsulated double brick has an R value of around 0.7. An insulated standard 90mm stud timber frame can have an R value of around 2.7. Even if you insulate a… 17 10140 Yes, unless you are in a low intensity rainfall area or the area is protected from rain. Do you have access to NCC Part 2 or can you download it? I can email you a copy… 10 10364 ask the surveyor for clarification would be the logical approach 1 15967 |