At what stages in life do you think you’d use a mortgage broker?
- Purchasing a first home.
- Buying an investment property
Those three were easy but there are some others that I’ve NEVER seen in any description of what we do. For example, I regularly see instances of:
- People trying to separate properties after divorce and who to know what the banks will lend them
- People who spent up when times were good and then found themselves struggling in the downturn
- People who have taken on too much consumer debt and find themselves paying all of their wages to lenders
In fact, brokers are often the first port of call for people in financial trouble. When your bank says no to you desperately trying to refinance and reduce your outgoing repayments, who are you going to turn to?
Being faced with many clients in these situations, what have I learned?
If getting divorced:
- Keep things civil! Your ability to negotiate calmly with your ex will save thousands in legal fees and months of mediation
- Get independent advice from a solicitor. Yes it’ll cost, but the alternative is to end up with less than what you’re entitled to
- Find out from a broker whether you’d be able to support your home loan on your own. The quicker this happens, the quicker you’ll be able to apply to the Family Court to separate everything without being taxed.
If you’re currently earning a packet:
- Don’t take it for granted! Pay down what you can and start stuffing it into bank accounts and other investments.
- In our online course we have a simple calculator that shows you how much interest you pay each month on your debts. It is staggering when you think of debt in terms of that monthly amount (especially when you consider that it all could have gone into your own equity). Yes, you need to take on some debt to get what you need, but be sure to differentiate between needs and wants
If you’re currently in too much debt and struggling to stay afloat:
- Take a deep breath and go searching for information on ALL of your debts. Getting a handle on exactly what’s there is the first step
- List out those debts along with the interest rate, minimum repayments, extra fees and loan terms
- Go here: http://undebt.it/index.php?lang=en and enter them in.
- Be wary of taking on more debt to pay out existing debt. Be wary of companies that take control of your finances.
- Consider consolidating your debt into your home loan, but be aware that this likely doesn’t fix the underlying problem – your spending habits.
Matt and Alex
p.s. Don’t forget that we can help you with your home loan refinancing or purchasing and life insurance needs. Email us with any questions you have!
p.p.s. Thank you so much to everyone who signed up for The Wealth Map in our little launch a few weeks ago! And sorry we couldn’t win anyone a Lexus!