When real estate buying is motivated to create a home of your own, in most cases the goal is to use as little external financing as possible without external financing risk. The purpose of this writing is to introduce atypical banking products and a product combination solution to reduce all repayments.
As a taste, a table showing that a combination of different monthly installment loans and different number of home savings products will make all the repayments.
For a classic commercial bank loan of $ 10 million, you have to pay $ 12.61 million over 10 years if you want to exclude interest rate risk, but this can be reduced by up to $ 10 million with a higher repayment and upfront savings on 5 home savings.
Step by step guide to what the combination is all about
Classic Commercial Bank Real Estate Loan :
The repayment installment of the loan taken out is fixed over the entire term – this is the classic annuity loan – in this case $ 103,411, which is a 10-year, 4.45% interest rate loan product with a 10-year term, for which the bank 300,000 USD. Initially, the repayment tranche accounts for nearly 36% of the interest payment, and then the interest burden decreases as the capital decreases.
Commercial Bank Home Loan Combined with Home Savings Savings:
This is also based on a 10-year bank loan with a maturity of 260 months, in order to pay the two home savings (to include the $ 100e down payment and the home savings savings) to be combined in this calculation, so the monthly installment payable to the bank It decreases to $ 60,018. As a result, there is a monthly payment of $ 40,300 for the savings of the two apartment savings banks. With state subsidy and deposit interest, savings of more than 1.3 times will be repaid in the 48th (and then re-tied) in the 115th month. The total amount to be repaid is reduced from $ 12,442 thousand to $ 11,580 thousand, but it is obvious to the bank that we pay more interest in this arrangement, whether two things can be true at the same time.
The table shows that involving two LTP (Home Savings Savings) savings, you can get $ 1,387,000 worth of government support over 115 months, of which $ 862,000 is used to reduce your total repayments, plus $ 525,000 more interest due to The scheme has to pay interest on higher capital on average.
If the LTP savings cannot be utilized elsewhere by the family, it is always worth investing in a new home loan or even an existing home loan. A major benefit of reducing all repayments is that the amount payable to the bank is lower, for example, in the event of a periodic loss of income, failure to pay LTP savings will not result in bank termination and will not result in a negative debtor list. If the household could no longer bear the monthly repayment increase with the payment of the LTP savings, then the loan would have to be restructured, either in the form of a loan or in many cases without it. Importantly, LTP prepayments can only be made on home loans . Or only Ptk. Support for close relatives (by blood or other right: parent, grandparent, child, grandchild, sibling, spouse). Now, it’s worth returning to the first table, where all the repayments available for different loan amounts, monthly payments, and enrolled LTP savings are shown.
How can additional savings be made on all repayments?
1. Housing Savings Replacement with a Home Loan
The example above can be further optimized, this construct is especially useful when you need to exclude interest rate risk for a long term with a low monthly payment. But now I’m going to present a case where we combine LTP savings with a 5 year interest rate loan. At the same time you can enjoy the lower interest rate of the 5-year interest rate and the guaranteed 3.5% home loan interest rate (which can be applied for after the savings period, if you are in creditworthiness). An important prerequisite for this arrangement is that you must be creditworthy at the time the loan is redeemed at the same time as the savings are repaid.
Although the total repayable amount has decreased by only $ 10,000 compared to the previous one, the requested state subsidy is $ 658,000 lower, meaning that the tax number related to the savings can be released and transferred to a family member after borrowing or used for new housing , renovation, purchase can be tied to a target .
2. Grace period
One of the home savings offers an instant bridging loan at a rate of 3.79% for an income of 200,000 USD, which, combined with LTP savings, pays the same 100,000 USD, the lowest total repayment to date, 11.3 million USD. In this scheme, it is very important that the owners of all 4 tax numbers have to be included in the loan, so this is only possible for families with such a loan amount. However, this is essentially a grace senior loan with LTP prepayment. Some banks can apply for a loan with a grace period, in which case, just like the above, you only have to pay interest for up to 5-10 years. Combining a similar construction with shorter-term LTP savings can result in additional interest rate reductions.
If you have a cafeteria at your employer, you can apply for a home loan repayment subsidy or a home loan repayment free of tax. This means that, for a gross café of 100,000, the state does not have to pay a $ 34,220 burden. With an average $ 250,000 annual cafeteria frame, this will save you more than $ 850,000 over 10 years.
4. Health fund
In 2018, you can pay your mortgage loaner with a monthly payment of $ 20,700 (15% of the current minimum wage for a home loan repayment), which is $ 27,400 a year, based on 54,480 personal income tax credits and 6% health fund cost , more than $ 50,000 in annual PIT savings over a 10-year term, can reach $ 500,000 . All you have to do is submit your credit agreement to the health fund once, and then arrange for the correct balance and claim it back as a tax credit on your tax return, which will appear on your health fund balance.
5 . Savings reduced credit
One bank has a loan product that is sold at a 0.5% interest rate premium on a normal facility, the point of which is to have either a fully liquid savings (overdraft) or outstanding loan amount with that bank. reduces the amount of interest payable by up to%. I often come across cases where the family gathers more children to keep at home and in the meantime holds the money in a bank account. In this case, up to 70% of the interest rate on the loan can be saved on the loan. That could amount to millions of USD . Another group that is very keen on this scheme is the typically entrepreneurial (sometimes high-spending households), whose savings in a bank account can be seen as a down payment, low-interest liquidity / revolving credit line, and at the same time will also reduce your payable amount.
It is clear from the article that if you take advantage of all the available benefits (home savings state subsidy, coffeehouse tax relief, health fund tax refund), you can easily obtain all repayments equal to one loan amount, ie interest-free , but current In an environment of interest, it is also easy to achieve that even less than the amount borrowed would have to be repaid . I will be happy to make a personalized offer so that you pay as little credit as possible.