WHAT CAN I DO ABOUT RISING MORTGAGE RATES?

This little report was written by my mortgage broker, its good advice and I thought I'd share it.

Supplied by Jo Choat of Jo Choat Mortgages

1/3 of fixed rate mortgages are due for renewal in the nest 12 months, understandably there are a lot of worried home owners out there.

Now is the time to have a look at your mortgage and organise your plan for when your fixed rate expires. A couple of things to consider are, look at consolidating your debts. If mortgage interest rates are on the rise so are those other interest rates.

Higher interest rates mean higher payments, if you can afford this increase it is in your best interest to absorb it, if not the alternative of lengthening the term of your mortgage maybe an option, however remember when interest rates go back down don’t reduce the amount of payment. If you receive a pay rise look at putting the extra money toward your payments to reduce the term of the mortgage again.

Reducing your mortgage is always a good idea. Saving in one account and paying interest to a mortgage does not make great financial sense. For example if you are paying a mortgage at 9% interest and assuming your tax bracket is 33 cents in the dollar then you would have to have an investment interest rate of 13.5% just to break even.

Recently in the Herald on Sunday 8th July 2007,Mike Davy of Westpac was quoted as saying that by the end of 2008 the economy would have softened and the RBNZ would begin to ease the official cash rate. Mike’s advise was to fix for up to two years only.

So for any financial mortgage advice give Jo Choat a call. She has 20 years experience, she is an award winner and a property investor herself so speaks from personal knowledge. She has a great personality as well!

Ph : 09 4863224 or Mob: 021476322