The last 12 months have seen Rising House Prices, and you may not realise but what that means is your Loan to Value Ratio or LVR may have dropped, and so should your interest rate. So now is the Time to Renegotiate or Refinance
At Awesome Lending We often talk about the 4C’s of Credit and how they are you path to wealth creation through property.
That’s because these 4C’s are how the lenders and Banks determine you risk profile to them and weather they will lend to you and how good the rate might be. The better your credit worthiness the better the interest rate.
At Awesome Lending we understand that the recent rate rises have been hurting everyone and the shortage of properties both for sale and to rent is making things tough. The interest rate rises, and property prices rise have seen many good people simply priced out of the market.
The silver lining for existing homeowners is the value of their property has gone up. And with it the Loan to value Ratio has gone done
Loan to Valuation Ratio (LVR) is the percentage of the total value of the property or asset that you’ve borrowed. To work out your LVR, take the amount you plan to borrow or your current loan amount and divide it by the price of your asset. This figure is your LVR.
No as this ratio goes down so does your risk to the Lender or Bank and so should your interest rate.
This of it this way if your LVR is 95% then if the bank forecloses there is a very big risk that they may not get all their money back. Especially if the value of properties suddenly dropped. That because there is only a 5% buffer against the difference between the price and the loan.
Now consider your properties gone up in value and you have been paying your loan off, so your LVR is now 60%. Now the Bank has a 40% buffer against the difference between the price and the loan. That’s a lot less risk for them.
So, for example we have one lender who has a difference of 1.1% between their highest interest rate and lowest interest rate, simply based on LVR.
How Awesome can help.
This allows us to work out the value of the property for you and based on your loan amount your final LVR.
For our existing client we use a great service that automatically email lenders every 6 months with the property value, loan amount and the current lender “Best Advertised Rate” so ensure your rate is the most competitive available.
For New Awesome Clients we manually contact your bank or lender for you armed with your valuation, loan amount and their “Best Advertised Rate” to negotiate the lowest rate possible without you needing to be involved.
If we still don’t get a great response, we look around and compare over 40 home loan lenders and their products to find one that might be a better fit for you.
Finally, rest assured that we’re available and here to help you any way we can.
Awesome Lending Solutions
Suite 1D Level 2, 802 Pacific Hwy
Gordon
NSW 2072
ABN: 60 144 897 781
https://www.awesomelendingsolutions.com.au/theres-a-lot-more-than-the-big-four/
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Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters. Information in this article is correct as of the date of publication and is subject to change.
