$238,000 Mortgage Paid Off In 6 Years
CLIENTS'S SITUATION WHEN WE FIRST MET - CLIENT IN HIS LATE 40'S
•HOME LOAN - $238,300 PROJECTED TERM– 27 Years HOME VALUE - $380,000
PROJECTED INTEREST-$214,413 TOTAL COST- $452,713 INTEREST RATE - 4.81%
•PERSONAL LOAN- $33400 PROJECTED INTEREST-$5730
•CREDIT CARD - $17,300 PROJECTED INTEREST- $46,993
TOTAL COST- $64,293
•PROJECTED SUPER-$363,000 SHORTFALL (1.3 MILLION) - $937,000
•TAX OBLIGATION – 21 YRS @ $26,557 = $557,697
WHAT WE DID.
Refinanced back to 80% LVR for the residential mortgage. ( We didn't go over 80% to save mortgage insurance )
This gave us access to just under $66,000 in cash to work with. We were also able to get a much better interest rate at 4.19%.
We cleared the credit card debt, put down a 5% deposit on brand new investment property(kept $3,000 for legal costs etc.) and put the rest of the cash on the personal loan.
The Investment loan is on interest only to free up cash flow to drive down the debt on the primary place of residence. We did it this way as you get no form of tax breaks for owning your primary place of residence there fore its non tax deductible debt so it needs to go first.
We established a price range for the investment property first then we searched for the best area within that budget.
Key points to look at when searching the market for a good investment.
Where does the area stand in its property cycle?
Over 5% yield
A diverse economy also aids in long term steady capital growth.
These are just to name a few. Our research team costs us over $100,000 per year.
We used brand new property due to the tax deductions that come along with the use of new property.
This client will save $200 per week in tax
This is the cash flow structure that is being used.
The projected results are life changing.
An Interest Saving Achieved on Primary Place Of Residence of - $172,407 and paid off in 5.5 years
An Interest Saving of $70,023 across your personal loan and credit card.
21.5 Years of opportunity won back. (Term Saving)
Also adding $500,000 to his retirement wealth as his projected super was not enough to retire on financially free.
These are the results that make getting out of bed every morning for the Breakthrough Potentials team easy.