PROPERTY

Why it's getting tougher to refinance your mortgage

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It's becoming more difficult to refinance.

If you have multiple loans, chances are you have found it increasingly difficult to refinance over the past few months.

Banks are now reassessing you at up to 7-9% instead of the 4.5% that you may currently be paying.

In many respects property investors have life easy, in general - once a property is bought, it is simply a matter of sitting back and reaping the rewards for little effort.

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While we do pay land tax, we do not pay high income taxes - as we are geared - or capital gains taxes, if we never sell.

Your ability to obtain money from the banks and keep repeating is what property investing is really about - refinancing provides you with ongoing equity to reinvest in new properties.

With this in mind, it is imperative to do whatever it takes to meet the bank's criteria - whether that is reducing your expenses, declaring more income, paying more tax or getting a second job.

While refinancing has been more difficult recently, if there is a will, there is usually a way.

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Chris Gray is founder of Your Empire.
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