Refinance when going overseas

Discussion in 'Loans & Mortgage Brokers' started by Hillbilly, 24th Aug, 2018.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Hillbilly

    Hillbilly Active Member

    Joined:
    26th Jun, 2015
    Posts:
    27
    Location:
    Sydney
    Hello,

    My husband and I are boomers and off overseas for a few years on a midlife adventure. We currently have our PPOR and two investment properties in Australia and another one overseas. Overall, the leverage of our mortgages to properties is about 40% so rent from the properties covers mortgage payments. I am currently still working full time but when we go overseas there will be no employment income here to service the mortgages (although the rent fully covers). We have two of the loans coming up for refining shortly and of course rates have increased a bit with current lender. Can we refinance to get better rates or is it impossible given our age and/or lack of PAYG income in Australia?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,672
    Location:
    Australia wide
    You will need to be able to show ability to service to refinance.

    What do you mean by 2 loans coming up for refinancing soon? Most loans will have 30 year terms which will see the loan fully paid off during this period.

    Also consider the land tax aspects of going overseas, especially nsw and qld properties.
     
  3. hobartchic

    hobartchic Well-Known Member

    Joined:
    11th Sep, 2017
    Posts:
    1,513
    Location:
    Hobart
    I hope you are aware that you will both lose Medicare eligibility if you spend (check, I think it's five years) too much time overseas. Having medical insurance is a very good idea. However, coverage for those aged 70 plus is not great.
     
    Terry_w likes this.
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,599
    Location:
    Gold Coast (Australia Wide)
    Act in advance if thats wise to do so

    ta
    rolf
     
    Terry_w likes this.
  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,130
    Location:
    03 9877 3000
    Start by renegotiating your rates with the existing lender. This often gets the desired outcome without the hassle of refinancing. If the existing lender won't come to the party, then consider refinancing.

    If you do refinance, you need to do this whilst you've still got an income.
     
    Brady likes this.
  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    3,977
    Location:
    Canberra, Brisbane and Sunshine Coast
    Agree with Pete

    Arm yourself with some competitors offers and give your bank a call - threaten to walk and see what they counter with. If a broker originated the loans - speak with them about a possible rate reduction.

    Cheers

    Jamie
     
  7. Hillbilly

    Hillbilly Active Member

    Joined:
    26th Jun, 2015
    Posts:
    27
    Location:
    Sydney
    Hi Terry what I mean is I have two loans currently on fixed rates coming up for renewal. Not the whole loan.
     
  8. Hillbilly

    Hillbilly Active Member

    Joined:
    26th Jun, 2015
    Posts:
    27
    Location:
    Sydney
    Hi there. Yes we are aware of Medicare and have spoken to accountant about tax etc. All very good points to keep in mind. Thank you
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,672
    Location:
    Australia wide
    Well, they will just roll over to variable for the remainder of the loan term
     
  10. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,130
    Location:
    03 9877 3000
    That's a time when everyone should be renegotiating their loan. When fixed rates expire, many loans switch to the variable rate at the published interest rate, not negotiated rates. When fixed rates end, it's always good to review the loan, but that doesn't necessarily mean refinancing.
     
  11. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    And loss of CGT discounts. Possibly even for past CGT that is unrealised since ScoMo's role as PM means unless an election is quickly called the laws to strip CGT discounts on past ownership could still get passed.
     

Do you need help with investment strategies, don’t want to buy the wrong stocks, or you just need a regular income stream? We provide the research to ensure your investment selections achieve the goals. This is the value of advice.