Too many property owners are paying the price for not obtaining independent advice when they arranged the finance for their property purchase.
No matter how informed you are or how good a loan might seem, discuss the loan structure & your options with a property lawyer before committing to the loan.

Tip 09 – How To Increase Contingency Funds

  • Where you structure the loan correctly, one way to build up your contingency fund is for the loan to be Interest-Only for the first year.

Example:

  • A Principal & Interest loan means that you make interest payments PLUS debt reduction payments.
  • An Interest-Only loan means that you only make interest payments, and NO debt reduction payments.
  • Each month, pay an amount equivalent to a principal and interest repayment, however:
    • the debt reduction payment component is deposited to the contingency fund, &
    • the interest payment component is deposited to the loan account.
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