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6 thing to know when choosing a positive or negative geared property

With the election campaigns well on their way, Negative gearing has once again become a hot topic with passionate debates for and against.

The implications of negative gearing are far-reaching impacting everything from a single investor to the wider economy and the property market as a whole. For this post, I want to highlight 6 points you should keep in mind when thinking about buying a negative geared property.

Contrary to popular belief, the comparison between a positively and negatively geared property is not a question of ‘good’ or ‘bad’. It depends on your circumstances and goals. In either approach, you borrow a large amount of money to own a large asset, so it’s important to consider the best way to do it:
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Things to know before you consolidate your credit card debt

Credit card debt has become a big problem for many Australians. According to RBA report published July 2016, we owe nearly $33 Billion ($32,998,000) in Credit Card debt!

Considering the average rate of interest for this is sitting around 16.82%, it’s serious drain on a family’s budget.

With current home loan interest rates available at well below 4%, refinancing and using the equity of your to consolidate your credit card balances can be an effective way to eliminate this debt. However, there are certain things you should understand before you go down this road.
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What you need to know about Lenders' Mortgage Insurance (LMI)

Lenders Mortgage Insurance (LMI) is a great way to achieve our dream of home ownership when you don't have the 20% deposit usually required by the banks and other lenders.

At this point in time, some banks and financial institutions could give you a home loan up to 95% of the value. This means on a home valued at $600,000 the bank may lend you $570,000, allowing you to get into a home with a deposit of $30,000 instead of $120,000. Don't forget the costs like stamp duty and legal are on top.
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Why a cheaper home loan interest could cost you thousands

Jackie came into the office, excited about the announcement of lower rates. She would have been the ideal client – good home value, secure job, a great income and a super credit report.

But, I turned her down. Mind you, I’m not alone, any good Credit advisor or broker should be doing the same thing.

Here are my reasons:

1. Jackie’s current home loan was 3 years and 8 months old and at the advice of family, she had locked in a 4 year fixed rate. Under these terms, there was a penalty for breaking the term which could amount to her paying over $17,000.
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