We received an unexpected bonus in our recent refinance process. We are refinancing away from provider #1 (no names, no pack drill) to provider #2, who is providing us with a “Time Out” loan, also known as a “shared equity” loan, which allows us to repay the loan at a reduced rate. It works like this: we take out a standard loan at the going rate for an amount. The TimeOut loan includes an additional loan for about 10% of that amount, which will be used to pay the shortfall between what we pay each month & the repayment according to the interest rate.
However, the bonus on this transaction was that provider #1 doesn’t want to lose our business, & have offered to allow us to retain one of the accounts that we would otherwise have closed, with a substantial limit & a zero balance. It really means that they have already offered us the loan that we would have been asking for anyway – in other words, to borrow further against the increasing equity, which nicely takes care of the deposit on the Townsville property due for completion in 2010.
