Phillips family found us through a family friend, who bought the first home using a mortgage arranged by us. Phillips’ objective was to buy an investment property & reduce the interest cost of the current home loan.Phillips family found us through a family friend, who bought the first home using a mortgage arranged by us. Phillips’ objective was to buy an investment property and reduce the interest cost of the current home loan.As the first step, we used our broker resources to find out client’s property price.
We did not want the client to give an offer for an investment property and then find out there is a deficit in the funds required as the current home market value is lower than expected. Our valuation showed the market value of the current home is lower than the real estate agent’s recent estimate.
Though this was disappointing piece of information, the clients had the opportunity to draw a realistic goal. Based on the expected equity release, we estimated a price range of the property the client could afford. We estimated the total fund requirement for the client and the investment amount in the new investment property, this was really helpful for the clients who were not so number savvy.
The client had $ 75,000 in the offset account. The client wanted to invest this as equity in the new investment property. We guided the clients to the correct path. The client redrew the extra funds, raised a new loan for the investment property against the prime residence. The loan was split to two where as one is the home loan and the other one is the equity release where the total funds are spent to buy the property. Therefore, the investment property component is distinguished from the home loan to help at the tax time and also to produce to ATO in the event of an Audit, saving money and time.
After the loan is refinanced, $ 75,000 was deposited back to home loan component. As a result the client could save nearly $ 4,138 over 5 years simply because any interest payable to investment property loan is tax deductible.
We do not only arrange a home loan. We use all our valuable resources to go above and beyond to help the client before they realise they need it. Being a CPA accountant and a part of a tax partnership, we helped Phillips to structure the property in the most effective manner.
we did not stop from there. Check the next mistake which would have done by the client
Stay tuned to know what repayment choice he made.
Rands Financial Services is not an only a Mortgage Broking Firm but also CPA Accountants and owns a Registered Tax Agency. Therefore, our advice and assistance are more comprehensive than an average broker.
Therefore we always explain the options in details and clarifying any doubts, make appointments at a place and time convenient to you. Moreover, we update you with news often and revisiting your financial situation and continuously looking out for products which will reduce your interest at different stages of life.
