Knowledge is power.
What does the future hold? With increasing inflation and the Australian dollar value who knows whether the spate of interest rate rises the country has been perceptible to, is over. No body knows. It is likely that there could be more interest rate rises on the way. Although there are many economists predicting rates to stay on hold for at least the remainder of this year.
What can we do to protect our selves against the increased burden of interest expenses and living costs?
Know your position.
- Firstly sit down and assess your asset and liability position. If you are not sure how to do this, then please call us, and we will be happy to assist you with this.
- Then work out your budget. Include all income you receive (Net of Tax) and include all your current expenses. Set yourself a budget that is realistic and workable for you and your family.
- Work out all your commitments eg. loans and credit cards and find out what interest rates you are currently paying on these facilities.
- Then I recommend calling a professional mortgage broker to see what can be done to reduce your cash flow by either consolidating your debts, restructuring your lending or fixing a portion of your current lending.
- Once you have seen a professional mortgage broker, then assess your new commitments and ensure that the restructure or consolidation will in fact save you money each month.
- Be wary that you are not encouraged to refinance your home loan without being aware of the cost involved to refinance, eg, break costs from current lender. It may be best to increase or restructure your facility with your existing lender to avoid costs.
- To ascertain whether refinancing is a viable option for you, please ask your mortgage broker to work out how much you will save on an annual bases by refinancing your home loan.
- Some lenders are offering rebates on refinancing costs should you change lenders which can offset some of the expense of doing your refinance. Ask your Mortgage Broker which lenders will offer you a rebate.
- Lastly make sure know you have a goal to strive for, whether that be reducing your mortgage by a certain amount each year or maintain your current debt level until children are a certain age so then your can start your debt reduction program.
- In this current environment please try to avoid missing home loan payments or neglecting to pay phone or credit card accounts, see a professional before there is a problem. Missed payments or credit defaults will seriously impair your options, and negate strategies which may assist your cash flow in times of need.
Please call our office if you need any help or advice in managing cash flow and working towards your goals for the future.