Now that we’re well and truly into the new financial year, it’s a good time to conduct a money health check to ensure that you’re making the most of your current financial position.?
Here are five tips that can help you get started:?
- Review your home loan - The mortgage market can move a lot in 12 months, so even if you got a great deal at the time, it’s possible you might be able to find a comparable loan with a lower interest rate.
- Review your budget - If you’re able to identify ways to reduce your spending, you could then adjust your budget accordingly. You might decide to use the extra money for investment purposes or to get ahead on your mortgage.
- Review your investments - Think about how much money you want to pay into superannuation (from 1 July, the concessional contributions cap increased from $27,500 to $30,000) and how much you want to allocate to shares and property. It is also a good idea to review how diverse your investments are, whether you have cash, stocks, property or another investment.?
- Review insurances - Do you have all the insurances you need? And, do you have the right amount of cover for each of those insurances?
- Forward planning - Give some thought to your career, because your current and future earnings are likely to be the main foundation of your long-term wealth.
These tips are a great starting point but there are a few specific areas I review with my clients that have yielded excellent results and helped some increase their borrowing power.
- Review HECS debt. I recently had a client who was paying a HECS debt out of their pay. Upon review, we discovered that they had actually already completely paid off their HECS. Once their employer had been updated, their take home pay increased by approximately $500 a month, which therefore also increases their borrowing power.
- Review your car loan. Let’s say you owe $20,000 on your car loan and the repayments are $700 per month. If you were in a situation where you could pay out that car loan, thereby removing the $700 commitment, you could increase your borrowing capacity by around $110,000 depending on your circumstances.
- Review credit card limits. If you don’t need your credit card, reducing the limit or even closing it down entirely is an easy way to increase your borrowing power.
- Shop around with lenders. This is a broker’s specialty. Having access to such a wide range of lenders allows us to compare which lenders may be able to offer a larger borrowing capacity based on particular circumstances. For instance, I recently compared two lenders for the same client. We discovered that one was able to offer $1,700,000 but another was able to offer $1,885,000. The extra $115,000 could make a real difference to a client’s property search.?
When it comes to ensuring that you’re in a strong financial position to make your property goals happen, I’m your dedicated guide throughout the process. Reach out to me today.
