New mort­gage bor­row­ing rules prov­ing chaotic

Southern Real Estate Guide - - SOUTHERN HOMES -

in the sand will only alien­ate the lender. Talk­ing it through will pro­vide the so­lu­tion that will pro­tect your cap­i­tal.

Lo-Doc bor­row­ing – where busi­nesses or self-em­ployed are un­able to sup­ply re­cent fi­nan­cials, and want to ex­pand, pay tax, re­struc­ture etc, tra­di­tional bank lend­ing may or may not work. A bro­ker has more strings to pull than a pup­peteer and will know where th­ese deals fit. Pre­par­ing for fu­ture shocks: Mort­gage rates have been low for so long that many of us have been lulled into a false sense of re­al­ity.

Tak­ing out a mort­gage now, you should be think­ing of af­ford­abil­ity in two to three years time if rates are around 8.5 per cent. Also you want to adopt a strat­egy around fixed and float­ing rates that will help you kill off the mon­ster more quickly.

The magic bul­let is sys­tem­at­i­cally plonk­ing more money into the debt and us­ing the right sort of bank­ing fa­cil­i­ties to be more ef­fi­cient in the way your money is han­dled. A few cof­fee shops and cloth­ing stores could go bank­rupt if ev­ery­one did it, so you can al­ways con­tinue be­ing mag­nan­i­mous by giv­ing to oth­ers rather than your­self. Im­pact of higher in­ter­est rates: A $400,000 mort­gage over 30 years at the cur­rent pub­lished float­ing rates of 5.75 per cent would cost $2335 per month. If the rate goes to 8.5 per cent, that same loan will cost $3076 per month. Then of course you have

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