If you have a standard principal and interest mortgage with no redraw, and you make your repayments straight into the loan account you can run the risk of one day needing your money urgently for whatever the reason may be.
You will then need to go back to the lender and apply to borrow against your home.
Now if your financial circumstances have changed, you may not get what you have asked for, which can put you in a vulnerable position and you may make some rash decisions that can have some serious outcomes for you.
First of all, having the set up as explained in “The Money Elements Report” is great for many reasons, one of the most important of them being, (for those of you that have built up equity in your property or saved money in the 100 percent offset account), is that it can give you peace of mind, mainly when times get tough… you will be able to get to your equity in the 100 percent offset account as you need it…you may need it to make mortgage repayments, or for grocery, or unexpected emergencies and so on.
Having a 100 percent offset account can give you much more cash in the bank than you ever thought possible…which gives you more freedom to make clear path choices in your life without the pressure of how to make repayments or how to pay bills… oh no! you have just lost your job…hang on, you NOW have some money to keep you going until you get back on your feet…the correct loan structure releases some of the anxiety and pressures by buying you some time that will help you, not to be in a position of making rash decisions.
Please understand that it does not matter if you still owe the lender your original loan amount or just a few thousand dollars, if you do not make your committed mortgage repayment as per the contract you entered with them, your home can be repossessed…so why take this risk…the lender may not have the same view as what I have just explained…but you know what, it’s not about the lender, it’s about you…TAKE CONTROL.
So, by having the equity in the 100 percent offset account at your disposal, it can help with tough times, as I’ve just said above, you have the money to make those mortgage repayments… and remember because you have set up the loan as interest only, all you are entitled to pay is the interest portion only, which means your money can go further…to have this security is important because even if your property falls in value, and you have already drawn down the equity and placed it in 100 percent offset account, as long as you make your mortgage repayments the lender should not call in the loan, or in other words, should not repossess your property.
(Some of the other reasons for the set up will be explained as you read through “The Money Elements Report”).
So, if you have the set up as shown in “The Money Elements Report”, you are not at the lenders mercy…you in full control of your financial future… remember, don’t forget that after the interest only period, you will need to reapply to extend for an additional interest only period (page 14).
Please go to www.moneyelements.com.au and for the report go to https://moneyelements.com.au/money-elements-report-calculator/