Don't give up hope of becoming mortgage free. How Prosperity Finance can help you improve your loan structure - so you can save on interest and repay your debt faster  (with a real client story).

It’s a good habit to regularly review your loan structure. The loan structure that was initially set up for you may no longer support your current situation or needs. Or, perhaps you have plans such as starting a family, upgrading your home or buying an investment property, but you are not sure how your finance should be adjusted to help you achieve your goals.

This article shows you how Prosperity Finance can help you improve your loan structure to protect your asset, reduce loan interest, pay off your loan faster, and even give you the ability to buy another investment property based on the equity.

Video timeline:

1. Client: “Feeling like there’s no hope of becoming mortgage-free” – 00:18

2. How loan restructuring helped this client pay off their mortgage faster, save interest and get mortgage free – 01:20

3. Prosperity Finance offer a free loan review service – 03:25

1. Client: “Feeling like there’s no hope of becoming mortgage-free”

This client has a reliable and good income, which means he is eligible to get his loan restructure application approved. We not only helped this client get his loan calculation done, but we also found out the main issues of his current loan structure.

Before the client found us, he was paying loans with two banks for one home and two investment properties. He used Bank A for one of his investment properties, and even though he had access to a revolving credit facility, he never used it. He used Bank B for his home and another investment property. He was frustrated with the messy loan structure and felt like there was no hope of becoming mortgage free.

2. How loan restructuring helped this client pay off their mortgage faster, save interest and get mortgage free

After we did the initial assessment for this client, we gave him some suggestions.

This client’s home was managed by a family trust and was secured by bank B. It could be discharged if it was sold by the family trust to the LTC (look-through company). As there was still some debt owing against this property, LTC could pay off this amount to the family trust by borrowing money from the bank. So, this home would become mortgage free and therefore be discharged from the bank.

Secondly, we recommended that the client choose the investment property with the lower market value, and minimise the loan amount for this property. This is because the two investment properties were under the same entity and managed by LTC, which meant that he could pay off the principal and interest faster. As the loan amount of this investment property was small, the interest rates that the banks could offer for this property would become less critical. Meanwhile, by minimising the loan amount on one of his investment properties, he could maximise his borrowing on the other investment property. At this stage, it was vital for him to choose the right bank with competitive interest rates for his larger loan on the second investment property.

What’s more, we were told that the client’s relative had a savings account in bank A, so we designed an offset loan for this client. This meant that the interest payment due on the loan was calculated only on the net balance of the loan minus the savings account. This arrangement would help the client save interest, pay off the mortgage faster and even have the ability to buy another investment property based on the equity.

3. Prosperity Finance offer a free loan review service

With our free loan review service, why go anywhere else? Our professional loan review process helps you get what you’re after and get you the answers to the following questions:

-    Is the interest rate at your current bank still competitive?

-    Are the features of your current loans being used effectively?

-    Do you have enough equity to buy another property?

-    Can any of your property securities be discharged or at least be split?

-    Can you fast track repayments to save thousands in interest?

Disclaimer: The content in this article are provided for general situation purpose only. To the extent that any such information, opinions, views and recommendations constitute advice, they do not take into account any person’s particular financial situation or goals and, accordingly, do not constitute personalised financial advice. We therefore recommend that you seek advice from your adviser before taking any action.

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As a financial advisor based in New Zealand (Auckland), we can help you to achieve your financial goals. No matter you are first home buyer, property investor, or looking for buying a commercial property, or if you are a construction builder or developer.

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Phone: 09 930 8999 Email: support@profin.co.nz