WHAT TO DO WHEN YOUR BANK WON’T LET YOU WITHDRAW EQUITY ?

If you are wanting to withdraw equity in order to expand your portfolio, but your lender says “No” – then what? Breaking early from a loan can be expensive and complicated, especially if you are on a fixed rate term. However, you also have to weigh up the opportunity costs of not breaking the term early, and having to miss out on valuable opportunities. The time you wait in order to save some money could actually cost you more in money which you have not been able to earn as a result. In order to find out what your options are, it is best to get advice from a trusted mortgage broker. The guys at Zinger Finance are always willing to listen to your lending troubles and assess the different options available to you.

CHOOSING THE RIGHT BROKER

Investors often get locked into the wrong type of loans for their investing journey. It is of utmost importance to choose a broker who will take the time to assess your goals and research the best financing options for you. Setting up the right borrowing structure from day one can be a deciding factor in your success. Without the right structure, you risk being maxed out on your borrowing power well before you intend on stopping. This means you cannot play out your strategy to its full extent – compromising the level of success you could have had. You may also be locked into loan structures which don’t allow you freedom to withdraw equity as you like, and may try to force you to cross-collateralize your assets. While this is a great strategy for the banks (they have more assets on the books against a particular debt), it’s not good for the investor as it could undermine the entire portfolio if something goes wrong with a particular property and the banks forced you to sell your good property instead.

BE WARY OF BROKERS WHO CHASE AFTER HIGH COMMISSIONS

Many brokers operate by advising clients to go with a lender that offers the most competitive interest rate. Often, clients think that they are getting a good deal because of this. If you are an investor looking to build a portfolio, however, the best lenders for you will be those who are willing to give you the mileage and release equity in order to help you expand – not those who save you on interest. Often hidden behind those attractively low-interest rate deals are other costs that enable the lender to get its money back without you realising. Also hidden are the attractively high commissions payable to the brokers who sign you up to the finance.