It is critical that you know which category you fall into!
|The Basic Borrower||• Looks for lowest rate and lowest fees in loan product
• Not interested in fancy loan features such as offset facility, redraws Interest Only repayments.
• Prime motive is to pay off loan principal off ASAP.
• Is less inclined to use their loan product as a tool for wealth generation.
|The Educated Borrower||• Compares home loans with a holistic view. Rates and fees are considered but loan features and structuring of loan are also contemplated.
• Appreciates that vanilla products with lowest rates and low on loan features may not be most suitable product in the long run from a financial perspective.
• Have experience in property investment and understand how to use offset facility, loan splits and Interest only repayment features to their advantage.
• Manages more than one property and seeks to minimize tax on investment property
• Can see through the gimmicks such as commission rebates and low rates offered in the loan market.
|The Player||• Is one step above the Educated Borrower in terms of understanding the wealth generation and wealth protection strategies.
• Knows the rules of the property wealth generation game but surrounds himself/herself with the best advice available: Broker (Finance), Accountant (Tax) and Lawyer (Legal).
• Always on the lookout for property opportunities and have finances available to act FAST, when an opportunity arises.
• Started off as a “BASIC” borrower but rose to the challenge to become a “Player” in the investment property game.