Page 35 - Smart Money

Smart Money

you are ripping yourself off. I was able to get him 3.99%, down from
5.3%, and he didn’t have to do a thing. It was minimal work for me.

If you are only paying the minimum repayment, you are never
going to get anywhere. If you are paying the minimum and you
are on an interest only loan, then you are not going have the
opportunity to use your equity down the track because you are
not going to have any.

People want that extra money to go out and spend on other things rather
than their mortgage. Some people think it is more important to go out
and have a great time, rather than paying off their mortgage. But you
need to sacrifice a little bit, especially when you are younger.

When I was younger and I bought my first home, we never used to go
anywhere. We were 20 years old, a time in life when most people are still
out nightclubbing. But my husband and I were actually paying off two
mortgages, staying home for meals, or just having a few drinks before we
went out, so it didn’t cost us as much when we did go out. That’s what
you need to do.

Even if you are paying the minimum repayment, there are different ways
to do it. Instead of paying monthly, which is the standard that the banks
require, if you pay your mortgage weekly or fortnightly, you are going
to save on interest. Interest is calculated daily, but charged monthly. So if
you are making more frequent repayments, you are still paying the same
amount over the month, but you are actually reducing the interest you
pay.

No future-proofing
You need to be aware that if you don’t make some sacrifices now, you’ll
probably be working when you are 60, 70, or 80 because you are not
going to have any money. That’s where financial planners come into play
and can do a plan for you.

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