The new year is a great time to take a closer look at your mortgage and overall financial situation, and consider if you can work smarter when it comes to looking after your biggest asset.
Advice for Investors
Do you have an interest-only mortgage? Is it something you’ve been thinking about?
These types of mortgage are mostly used by investors, and are structured so you only pay the outstanding interest on your loan, and none of the principal. It means you are banking on the value of your house to increase and provide you with a profit when you eventually sell it.
If looked after correctly you can gain some positive cash flow with an interest-only mortgage, particularly if you own more than one house and can use your investments to gain tax breaks. However, their ‘time in the sun’ appears to be up—banks are taking a harder look at their interest-only loans.
With law changes on the agenda for property investors, our advice is to start planning now to pay the principal on your mortgage.
Interest-only mortgages are also affected by the market’s fortunes and if house prices were to suddenly bottom out you could be left owning a house that’s worth less than the loan. Paying the principal gives you breathing room, and insures you against any sudden changes.
Advice For Homeowners
When was the last time you checked your mortgage interest rate terms or repayment schedules?
It’s easy to lose sight of your mortgage amongst all the other regular bill payments you make, but you could save yourself thousands of dollars if you get familiar with it.
As an impartial agent we’ll help you answer the following questions:
- How much am I paying and how much should I be paying? (And most importantly how much can I pay?)
- Is my mortgage structured correctly? Could it be better?
- Am I on the best interest rate? Have I done all of my homework?
It’s also important to remember that everyone’s situation is different and what your friends or family do with their mortgage may not work for you.
Whether you are an investor or homeowner one of our qualified advisers can help review your mortgage and make sure it’s working for you. Call us today 0800 000 517 to book a time.