Mortgage Refinance - Mates Rates Mortgage Broker - ORP (Ongoing Rebate Plan) and Discount Mortgages

Make a mortgage wish list

What do you want from your mortgage? To make your mortgage to work better for you, you must first work out what you want it to do, then find a lender and loan offering the right fit. Rather than making a wish list of features, try to identify the benfit you want, rather than the feature itself. A common mistake made by many borrowers is to make wishlist of features such as redraw, offset or line of credit. The reason this can become a problem, is lenders call different features by different names. What means one thing with one lender, often doen't mean the same thing with another. The other problem often encountered is your current idea of what a feature or loan type does, may not be exactly right so you might include or exclude options that you shouldn't.

A sample of common benefits often sought after by investors appears below. What the features are called is far less important than whether your lender or mortgage broker achieves these outcomes for you. Once you have your list, sort it from most important to least important. Work out features that are ‘must have’, versus those you might surrender if the price is right. This helps create a short list of viable options.Things that investors often want include

Smart structures to maximise borrowing power based on income

Lenders have different methods of assessing different income and expense types. For example, some lenders accept 100% of rental income, whereas others may only accept 50% or rental income. The same is true for other income types and expenses such as loan repayments. Which lender you choose and how you structure and mix them can affect borrowing power dramatically.

A better deal on fees and interest cost

It is important to consider the impact of expenses on your ROI and the trade off you may or may not make for extra features or flexibility against lower cost or vice versa. Make these comparison on forecast cost, rather than relying on compulsory comparison rates as these rates are prone to error. (see also comparison rate warning in our essentials section)

Competitive, flexible solutions for non-investment borrowings

Investors often have non-investment mortgages. These facilities are more likely to require greater access and flexibility options such as offset accounts. The advantage offset accounts offer to non-investment loans is reduced dramatically when applied against an investment mortgage.

Conversion of equity to accessible cash to seize opportunity as it arises

If you think you will need accessible cash, then is should be arranged before you actually need it. Including that requirement before need arises ensures you have a clear understanding of your capability and reduces the risk of unexpected surprises when it comes time to strike. However be warned, ready access to cash requires strong discipline to ensure it invested wisely.

Separation of security

A mix of lenders may increase your borrowing power and keep your costs down. It also provides asset insulation in the event that a repayment problem occurs on one of your investments. Take care to ensure you do not unwittingly expose your owner occupied property to a non-code loan when cross securitising.

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Mortgage Refinance Guide