Ray Hampson Finance

[Dutchy]

beware that line of credit facilities also carry a higher % rate

[Psyber]

beware that line of credit facilities also carry a higher % rate

Usually, but everything is negotiable if they want you business enough...

[Dutchy]

beware that line of credit facilities also carry a higher % rate

Usually, but everything is negotiable if they want you business enough...

agree but you wont get it to match the H/Loan rate

[mick]

beware that line of credit facilities also carry a higher % rate

Usually, but everything is negotiable if they want you business enough...

agree but you wont get it to match the H/Loan rate

I was able to negotiate a 0.6% discount on the published rate without too much trouble. In any case I think paying two incomes into a line of credit more than compensates for the 0.25% premium you may be forced to pay. There is also the added flexibility in having cash available without having to apply for loans. You will also find that it is much cheaper to purchase a car or other big ticket item through LOC, rather than through personal loans or a finance company. Sure LOC isn't for everyone but it worked for us.

[Dutchy]

Agree it can work Mick but probably for only 10-20% of the population who have the discipline...

If you got 0.60% off the normal rate for a LOC you would find you can get up to 1% off the same standard H/Loan

[Lunchcutter]

beware that line of credit facilities also carry a higher % rate

Usually, but everything is negotiable if they want you business enough...

agree but you wont get it to match the H/Loan rate

I was able to negotiate a 0.6% discount on the published rate without too much trouble. In any case I think paying two incomes into a line of credit more than compensates for the 0.25% premium you may be forced to pay. There is also the added flexibility in having cash available without having to apply for loans. You will also find that it is much cheaper to purchase a car or other big ticket item through LOC, rather than through personal loans or a finance company. Sure LOC isn't for everyone but it worked for us.

I would say to everyone who has yet to try LOC be very very careful... i know of a couple who have LOC and in the ten years that I have known them have managed to knock a grand total of 5K of the principle of the loan (withdrew funds for a couple of holidays, a 25k pool and a vehicle)... agree with other comments - this definitely does work, but only for those who have a large disposable income before they go into LOC and who have the discipline not to keep using the equity they build... just my thoughts,

[gadj1976]

Update : postponed the meeting cos both myself and missus are crook.

Thanks for the info folks, it's appreciated. At this time I'm looking at steering clear of it and just persisting with the ANZ with an offset account. We had a line of credit which wasn't doing a great deal for us at all, at an inflated interest rate to boot!

[Psyber]

.. I would say to everyone who has yet to try LOC be very very careful... i know of a couple who have LOC and in the ten years that I have known them have managed to knock a grand total of 5K of the principle of the loan (withdrew funds for a couple of holidays, a 25k pool and a vehicle)... agree with other comments - this definitely does work, but only for those who have a large disposable income before they go into LOC and who have the discipline not to keep using the equity they build... just my thoughts,

Absolutely, LC. It is like credit cards - a good idea only if you are very disciplined with their use and don't keep "borrowing" from the LOC for impulsive buys.

[Mickyj]

Slightly off topic but in another loans company ad they say"low docs or no docs" what the hell is low docs or no docs.
Just something the wife and I would like to know.

[Dutchy]

Slightly off topic but in another loans company ad they say"low docs or no docs" what the hell is low docs or no docs.
Just something the wife and I would like to know.

Low Doc loan is a very basic Loan for those that have plenty of equity in their house(s) but have no proof of income to prove they can service the loan....might be self employed, retiree, immigrants, bikies etc....so they sign a declaration that they can service the debt and the bank accepts that for assessment purposes

http://www.nab.com.au/Personal_Finance/0,,63801,00.html

[Mickyj]

Slightly off topic but in another loans company ad they say"low docs or no docs" what the hell is low docs or no docs.
Just something the wife and I would like to know.

Low Doc loan is a very basic Loan for those that have plenty of equity in their house(s) but have no proof of income to prove they can service the loan....might be self employed, retiree, immigrants, bikies etc....so they sign a declaration that they can service the debt and the bank accepts that for assessment purposes

http://www.nab.com.au/Personal_Finance/0,,63801,00.html

cheers

[gadj1976]

Hey, just thought I'd report back as promised.

Nothing special about it all. Pretty simple really.

Use a line of credit
55 day interest free credit card
pay everything into your line of credit account

The was an up front cost which I wont disclose here and a break fee from our existing loan. Costs we need to take into account of course before considering taking it up.

There were a few other things which I didn't ask him to explain because it was getting close to 9.30 - way past my bedtime

[devilsadvocate]

Hey, just thought I'd report back as promised.

Nothing special about it all. Pretty simple really.

Use a line of credit
55 day interest free credit card
pay everything into your line of credit account

The was an up front cost which I wont disclose here and a break fee from our existing loan. Costs we need to take into account of course before considering taking it up.

There were a few other things which I didn't ask him to explain because it was getting close to 9.30 - way past my bedtime

Sounds fine. As you say, quite simple - nothing groundbreaking. BUT I can't believe they can charge a fee for this.

IMO, this sort of stuff should be drilled into kids at every level of school. It should be taught over and over until every childs ears bleed.

It all comes down to the effect of compound interest and the time value of money to the banks.

The only problem with everyone fully understanding is the potential impact on the economy, so I guess there's no incentive for the govt to introduce this to regular maths lessons. Still, there's always the culture of instant gratification to keep the economy churning. The love affair with buy now, pay later is alive and well!