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The Effect Of Interest Rates

Posted by Paul Wilson

All investors are very aware that they need to get the best interest rate but where some investors make the mistake is that they take up their loan then sit back and over the years try to work out how they will meet their repayments and how they will start getting some of the principal paid off without further assessment of their initial loan.


It has been a common practice by many investors to take a fixed interest no principal loan as they are building their portfolios, but as we have seen over the past few years that has not always been the best decision.


We have seen rates go down, up again and then down again and in between these phases there have been buyers taking up fixed interest loans, some who have gained and others who have not.


It still seems that there will be a lot of instability in the next 12 months or so and because of this property investors are encouraged to:


1. Keep reviewing their finance structures


2. Ensure, by talking to a finance advisor, that they have the best structure for these uncertain times


3. And, if necessary take action to set up the best structure for their advantage.


It is one thing paying a low interest rate at the current time, but it is quite another staying with the same loan structure throughout the period of the loan.


Many thousands of dollars can be made or lost over a period of 20 years if a loan is not re-evaluated frequently and adjusted to get the best advantages.

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