For many of us, we’re pretty keen to pay off our home loan as fast as we possibly can. It’s often considered to be a deadweight hanging over us, tying us to our jobs.
This doesn’t have to be the case.
Some view a mortgage as good debt that can be leveraged to build wealth.
However you view your mortgage, it needs to be taken into account in your financial plan.
Let’s look at some examples:
- Paying off your home loan. How do you plan to pay it off? How often are you reviewing your loan – the interest rate, features and fees? Do you have an offset account that you’re utilising? How are you going to make extra repayments? Where will the money come from? How much and how often will you make extra repayments? Will you need to generate extra income? How will you do that? Second job? Rent out a room? Take in an international student? Better budgeting and money management?
- Leveraging your home loan. Do you have enough equity in your home to leverage it to buy an investment property? How much equity do you need? How much extra cash can be released from your budget to service the financial requirements for an investment property? Will investing in property ease your tax burden? Are you planning on building a property portfolio? If so, what the plan, timeframe, budget and end goal you’re working towards?
Wherever you’re planning to head in life, you need to have a goal and a plan that will help you get there, with milestones along the way.
Working with a financial planner can open your mind to more possibilities, help you explore more options and advise you on implications that you may not have thought of – especially related to tax.
Think about where you want to be financially on the day you retire, and then let’s work together to make that a reality.