Planning to sell house and pay off mortgage.
Have about $70k in offset/extra payments.
Would it make any difference if that was simply taken off balance owing on settlement or withdrawing before pay off and placing elsewhere?
Hopefully, this makes sense.
Have about $70k in offset/extra payments.
Well what is it? Offset account or extra payments made that you can redraw?
I have no idea what you are asking.
Hopefully, this makes sense.
offset in your bank account then it your money, you do what the heck ever you want you just pay the balance to discharge the mortgage
extra payment credit that a different ball game, if you redraw extra 70K, your loan amount will increase by extra 70K so you got to stump up extra 70K for discharge so it pointless
What's the practical implication of your question?
Let's say you've got a $1m mortgage (with $70k in offset). You sell your house for $2m. Notwithstanding the various other costs that come into settlement, you are going to have $1.07m in a bank account following settlement.
Does it matter to you exactly how the transactions get processed?
Hope this helps
So. Doesn't really make any difference…
Thanks
Doesn’t matter.
Keep it open. It's a free low rate loan whenever you need it. While its offset, it's costing you nothing.
Can you do that? Keep a minimal balance in the loan? Don't suppose it means that you don't have to go through all the paperwork to get a new loan?
Yes you can, go into the branch and ask your bank to bring down your balance close to $0 and they can stop the automatic repayments without the need to close your account and do the transfer of title etc.
If the security for the loan is sold then the loan would be paid out and closed. You would need to get a new loan when you purchase a new property, unless you do a simultaneous sale and purchase and retain the loan with the new security with no new funds and keeping the LVR. Either way you would need new paperwork.
Yes, if you have, say a 30 year loan, then you can keep it open for 30 years. Pretty common for people to even increase the loan (with increased property value), then keep it in an offset. Whenever the share market bottoms out, or its time to replace the car, add a shed, chuck a deposit on a rental..whatever ..the money is there.
Doesn't matter if your loan is $30 000 000 or 30 000, if you have offset funds of the same value, then it costs you nothing.
Yes
Edit: Normally it depends on if it is or will be an investment property. Unsure about selling off. Otherwise keep there to reduce interest?
Hope it makes sense