Interest in advance –
I thought I’d just draw your attention to end of financial year matters for property investors. Right now you should be considering whether to pay interest in advance. If you do, you can pay all the interest that will fall due in 2013/14 in advance and claim the deductions in this financial year.
Doing so could save you thousands of dollars. For instance, take a loan we’re organising right now for someone. The client is borrowing $420,000. This year she has a larger than normal bonus and so a higher tax liability. Next year she’d expect to pay around $29,000 in interest. Instead she’s going to pay that amount before the 30 June this financial year. By paying in advance she is actually paying a little less (saving around $1,000), as the lender offers a discount for up front payment.
This way she not only gets a small discount off the one year fixed rate available now, she declares the income this financial year. Even without the bonus her tax refund is over $12,000 more this year. That’s an interest free loan from the tax office for 12 months.
So have a think about whether this is for you. If so, you need to move NOW! Most home loans don’t allow for interest in advance, so you should contact us soon. We’ve been scanning the market for the most competitive interest in advance loans, so you can pick our brains.
And if you want to proceed to refinance your loan through us, you can pick our pockets too. Our normal rebates still apply – $1,000 for all many loans over $300,000 with higher rebates on loans over $500,000 and generous rebates right down to loans over $150,000.