Managing my Investments
This is usually a personal choice, but it also depends on your financial situation. There are pros and cons with both options, so it is best to sit down and look at your goals and objectives before deciding which is right for you. For example, you may have found your dream home for the right price and want to take advantage of the first home buyer incentives available. Or you might like the choice of location renting affords, but want to own property as part of your investment portfolio.
A financial planner can help you work through the benefits of each to ascertain which option is best for you at this life stage.
There are a number of different strategies that can be implemented, to help pay your mortgage faster, but it all comes down to which is the best way for you and your financial situation. One strategy involves changing the frequency of your repayments, e.g. from monthly to weekly repayments, thereby reducing the interest you end up paying on your loan. Another strategy is renegotiating your interest rate or comparing your loan with offers provided by other lenders.
Sitting down with a mortgage and finance adviser is a great place to start. At The Hopkins Group, our advisers have access to a range of different lenders and can help you navigate the lending finance market. Contact a mortgage and finance adviser.
What’s the best way to set up my mortgage? Interest only, or principal and interest? Fixed rate or variable?
Most owner occupier purchases are principle and interest so that the property is paid off in time. On the flipside, most investment properties are interest only to maximise tax gains.
A variable rate allows the borrower to make additional payments to clear the debt earlier and reduce interest costs over the term of the loan.
A fixed rate can be lower than the variable rate, but will incur penalty fees if the purchaser wants to pay the whole loan before the fixed term expires. While a fixed rate reduces the ability to make additional payments, the purchaser knows in advance what the repayments are and can budget accordingly.
Which loan type is right for you will depend on your financial situation, so it’s a good idea to seek advice.
How are my kids ever going to be able to afford to buy property? What can I do to help them get a foot in the door?
There are a number of ways you can help your children get a foot in the door of the property market, depending on what you can afford. A great starting place is instilling a sense of financial literacy in your kids early on, that way they’ve got a great foundation to build on.
Start them understanding the value of money as they grow and get them in the habit of saving. Down the track, you may want to provide them with an extra boost, by acting as guarantor on their first home loan or gifting a deposit.
There are also different loan products available, such as family pledge loans, which can act as a helping hand for your kids buying their first home. To understand how you can best help your children break into the property market, why not speak to an adviser today?
If you’re a first time investor, seeking advice from a professional adviser is a great place to start. While you can “do-it-yourself”, by establishing a trading account with one of the many brokers in the market, if you don’t understand the risks associated with your trades or uniformed about the share market in general, you may not be placing yourself in the position you want.
A financial planner can help you understand the share market, invest on your behalf, and develop a balanced investment strategy appropriate for your needs and financial situation.