Skip to main content
You've paid off your mortgage!  Now what?
Paid off your mortgage?  Woo-hoo! Break out the champagne and celebrate the freedom you must now feel! But once the dizzy excitement has passed, what will you do next?

Discharge or not?
The first question is should you discharge your mortgage? You might be able to keep the loan facility open, with a zero balance, and retain the option to redraw on the loan account if you wish. This can be a handy way of meeting unforeseen expenses in the future, or opening up investment opportunities.

If you decide to close your loan account check first if there are any costs involved. For example, you may lose an associated credit card. Or you may be up for substantial break fees if you’ve paid off a fixed rate mortgage early.

One of the traditional delights of closing out a mortgage has been receiving your title deed. However, with many states moving to digital land titles settlement processes this will become an increasingly rare pleasure. If you do happen to receive a paper title, remember it is an extremely valuable document that requires safe storage – perhaps with the solicitor who holds your Will.

Cash flow and equity
With your mortgage paid down to zero but still open, a number of opportunities arise. The best one is the extra cash accumulating in your bank account. Do you want to spend this on lifestyle choices such as home renovations, holidays or regularly dining out? Or maybe save it for a rainy day? Or use it to boost your retirement savings through salary sacrifice? (You can, of course, do a bit of each).

Then there’s the equity in your home to consider. It may seem strange to celebrate the paying off of your mortgage by immediately redrawing on it, but if done wisely, investing those redrawn funds in a portfolio of sound investments could hasten the day when you reach financial independence. You may also reap some tax benefits. 

Explore the options
Perhaps you want to simply enjoy the freedom of being mortgage-free. Whilst this is a great choice, if you want to investigate the wealth creation opportunities that open up once your home is paid off always seek professional advice.

Your Hindsight Wealth adviser can help you explore a range of options that are appropriate to your circumstances. With a well-crafted financial strategy and a little patience you can look forward to celebrating more of those woo-hoo moments in the future.

Labels:
Location: level 4/33 Remora Rd, Hamilton QLD 4007, Australia

Comments

Post a Comment

Popular posts from this blog

Don't Wait till you're in your 60's to see a Financial Adviser

Ask most 30-year old’s who their financial planner is and the typical response might be ‘huh?’ After all, financial advisers are for older people with plenty of money to invest, aren’t they? Well, yes, people nearing or in retirement will benefit from sound advice. But so will younger people. With the benefit of having time on their side, and with some help from an adviser, a 30-something can easily establish a wealth creation plan that can deliver a big payoff in the future. Harness compound interest It’s been called the most powerful force in the universe, and compounding returns – earning interest on your interest – can deliver dramatic results. Imagine that, at age 30, you commence a simple savings plan. You contribute $2,000 each year to an investment that delivers an after-tax return of 6% pa. After 30 years you will have contributed a total of $60,000, but your investment will be worth $158,116. The magic of compound interest will have delivered you an effortles...
Post a Comment
Read more

What to do if your job is made redundant.

Being retrenched from your job can be hard to accept. It is the sudden shock that catches most people but try not to take it personally. Redundancy is usually not about your personal performance; it’s the performance of your employer’s business, the industry sector in which you work, or even the global economy. Dealing with the key considerations below can help you take back control of your life and career. Take control Redundancy payment :  Genuine redundancy payments are given special tax treatment, including a tax-free amount related to years of service. Your lump sum payment might be your last pay packet for a while, so draw up a budget. This will help you identify areas where you can economise until you find a new job. Your financial adviser can help you work out the best use for any lump sum you receive. Mortgage :  If you have a home loan, contact your lender immediately. You may be able to adjust payments while you are out of the workforce. Centrelink :...
Post a Comment
Read more
Before you get excited (or not), I don't offer Pet Insurance, however I have received many questions about it.  So I thought I would offer some thoughts to consider for your independent pet insurance research. Australians are a nation of animal lovers.  According to the Australian Companion Animal Council, we have one of the highest incidences of pet - ownership in the world! Dogs and cats are our favourites; around 36% of Australian households own a dog, and 23% own a cat.  We're familiar with the companionship pets bring, and the social interaction they foster, but there are other benefits too: Lowered blood pressure and cholesterol; Increased physical activity; Strengthened immune system and reduced incidence of allergies and Children learn responsibility, empathy and respect. When considering a pet, you expect costs like food, bedding, the annual vet visit and so forth, but there are other costs you may not have thought about. Let's start at t...
Post a Comment
Read more