- March 22, 2024
- Posted by: legaleseblogger
- Category: Related News
Try Free Now: Legalese tool without registration
## Considering options for borrowing 750k
Broker’s approval for borrowing 750k vs. the need for only 500k.
Broker recommendation to borrow the full 750k and utilize an offset account for the remaining 250k.
### Pros and Cons of Borrowing 750k
The benefits of having access to additional cashback and emergency funds through the offset account.
The drawbacks of paying off the principal on the entire borrowed amount and the potential for increased administration.
#### Exploring Borrowing Options
Considering the two options presented by the broker – 250k offset + 500k fixed loan or 500k fixed loan with a small offset.
##### Original Deposit Plan vs. Broker’s Suggestion
Comparing the original plan of putting all funds down as a deposit with a small offset for emergencies to the broker’s recommendation.
### How AI Legalese Decoder Can Help
AI Legalese Decoder can assist in interpreting and simplifying the complex legal language often present in borrowing agreements and loan terms. This can help in better understanding the terms and conditions associated with different borrowing options, making it easier to make an informed decision. Additionally, AI Legalese Decoder can provide insights into the implications of utilizing offset accounts and the potential long-term effects on repayments and financial management.
Try Free Now: Legalese tool without registration
AI Legalese Decoder: Simplifying Legal Jargon
Introduction
Have you ever received a legal document that is filled with complex and confusing language? Many people have experienced this frustration when trying to understand legal terms and agreements. The good news is that AI Legalese Decoder is here to help! With the AI Legalese Decoder, you can easily decode and understand legal jargon, making it simpler and easier to comprehend.
How AI Legalese Decoder Works
The AI Legalese Decoder is a powerful tool that uses artificial intelligence to analyze and break down complex legal language into plain and simple terms. By inputting a legal document into the AI Legalese Decoder, you can quickly receive a translation of the text that is easier to understand. This can help you save time and avoid confusion when dealing with legal documents.
How AI Legalese Decoder Can Help You
If you are struggling to make sense of a legal document, AI Legalese Decoder can be a valuable resource. By using this tool, you can gain a clearer understanding of the terms and conditions outlined in the document. This can help you make informed decisions and ensure that you are fully aware of your rights and obligations.
In addition, AI Legalese Decoder can save you time and money by eliminating the need for hiring a lawyer to decipher legal documents for you. This tool can provide you with instant translations of legal jargon, allowing you to navigate through contracts, agreements, and other legal texts with ease.
Conclusion
Overall, AI Legalese Decoder is a must-have tool for anyone who deals with legal documents on a regular basis. By simplifying complex legal language, this tool can help you understand your rights and obligations more clearly. Next time you receive a confusing legal document, turn to AI Legalese Decoder for assistance and make your life easier.
****** just grabbed a
Broker probably gets more commission if you draw down more too. For me, the cash back difference is marginal, IÔÇÖd only borrow what I needed.
Are you with Kiwibank? Because with their offset facility they calculate minimum repayments based on the total amount of that portion of the loan. This means your repayments may be higher than if you went with the larger deposit option even if you were 100% offset.
Edited: for spelling
If you get the full mortgage you stand to gain $2.5k cashback extra (assuming 1%). You can view this as a 1% increased return for the first year. However, $250k in the offset account will make your repayments quite high as it will be paid off interest free as a 25 or 30 year table loan at 8.64% (Westpac choices offset). This would be in the tune of $200 + per week I imagine.
Option 3 is invest $250k in which case you need to beat the fixed rate in returns to make it worthwhile. Most people don’t like this as they prefer to take the guaranteed 6.9% on the table for example (fixed rate).
Maybe consider mixing all options. For example: 625k fixed loan, 50k offset as an emergency fund (what you are comfortable paying the interest free amount per week as noted in my first paragraph). Then leave $75k in a high yield savings account and consider investing some of that cash in something like a passive fund like the s&p500, global fund etc (discussed many times on this sub reddit).
This way you have your foot in all of the baskets.
I may be looking at this completely wrong, but I canÔÇÖt see any positive side to this except the minimal difference in cash back.
Your total loan to the bank would still be 750k whether you 100% offset that 250k facility or not. Paying $200-odd each week in principle to pay back a loan you donÔÇÖt need in the first place seems unnecessary. Unsure if Westpac is the same as BNZ, but you also wonÔÇÖt earn interest on that cash while itÔÇÖs sitting there offsetting the loan, so youÔÇÖll gain nothing except the 1%? initial return.
Why not do say $400k fixed, 100k offset, and put a portion of the remaining cash into a term deposit?
Are you thinking of an orbit account at asb? Where u would have an overdraft/floatingup to 250k, and u leave 250k in it so it is at zero. Costs only 12 bucks a month to have.
There are a few differences between offset and revolving credit that might be worth looking into as they might help you decide. It seems like they both offer different options for what you might want to do in the future.
I think one of the things about offset is that you donÔÇÖt have the ability to redraw. So if you had to stop working for a while, you would still have to make payments with offset, whereas the revolving credit would mean you can have the option of pausing and take immediate pressure off.
[Offset Mortgage or a Revolving Credit Account: Which is Better?](https://www.canstar.co.nz/home-loans/offset-mortgage-or-a-revolving-credit-account/)
I wouldn’t.
It’s like being approved for a $250k credit card. Sure credit is handy, but are you absolutely certain you have the self discipline to not touch this money?
Also someone defrauding you would cost you $250k.
If you’re with Westpac and have a $250k offset account, and the $250k is in your actual offset account then you won’t have any interest or principal payments to make on that $250k offset amount.
I’d do the offset for $250k to get the cashback. If it’s 1% then that an extra $2.5k for very minimal work. If you’ve fixed some of the rest mortgage for 1 year then after 1 year you can just move the $250k or a portion of it to the fixed and reduce the offset if you want to.