Really impressed with the Course and the Manual. I've attended other share trading courses but this will be the one that I'm recommending in the future. I was surprised with how many practicals there were and that I could go away knowing exactly how to place a trade.
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Karen Leslie – Mount Gambier, South Australia |
Driving Your Mortgage Down in Volatile Times
Wow! What a volatile time we have been experiencing with Global Financial Markets being in turmoil since early July.
The All Ordinaries Index, Dow Jones Index and Oil prices have been trading at all time record highs whereas the Sub-Prime Lending Market has been in meltdown. The A$/US$ Exchange Rate is now at its' highest point since 1984 exceeding 0.90c.
So what does this mean to the Australian economy and in particular your mortgage? In August, we have seen the RBA increase the official cash rate to 6.50% which is the highest rate it has been in approximately nine years. You may be noticing that some of the non-banks have been passing on interest rate increases of greater than 0.25% which should most definitely be a call to action for most borrowers.
After speaking to thousands of people over the past twenty years, I can say with confidence, that the number one financial goal that Australian families have, is to pay their home loan off as quickly as possible without affecting their current lifestyle. So below, I have designed seven very helpful tips that will help families do exactly that:
7 Tips for Driving Your Mortgage Down
- Spend less than you earn.
- Ask your Broker to negotiate a better deal for you.
- Always use an experienced Mortgage Broker who is a member of the MFAA.
- In volatile times consider splitting your loan between fixed and variable with a
100% offset account attached so that you will have both peace of mind and flexibility.
- Follow the Ryan Home Loans "5 Steps to Success" and "5 Cash Flows".
- Utilize your equity to invest into income producing investments.
- Attend a Mastering Wealth 1 Day Seminar to learn the strategies required.
Having said all of this, we all know the very best way to Drive Your Mortgage Down is to PAY MORE!
There are a number of methods borrowers may consider in order to do this:
- Obtain a higher paying job.
- Work a second or third job.
- Study part-time at Uni or TAFE to gain further qualifications
- Reduce your lifestyle expenses
Whilst all of these things can be excellent strategies, the best way, in our opinion, is to borrow the equity you have in your property/ies and invest it into income producing investments.
So the million dollar question is "what do you invest it in"? Initially, we encourage our clients to focus on developing multiple income streams rather than taking on buy and hold investments.
We believe the Stock Market can be the perfect vehicle to generate regular consistent monthly income.
You then have two choices:
- Learn how to do it for yourself
- Allow someone else to do it for you
We find our clients are often amazed to learn that if they pay an additional $435 per month, they can halve the term of a $200,000 home loan at the current standard variable home loan rate (providing rates remain the same). Even more amazing than this is that this equates to savings of almost $200,000 over the term of the loan.
So in summary, even during volatile times the age old rules apply relating to "Driving Your Mortgage Down". However, in order to significantly reduce your home loan, leveraging your equity into income generation investment strategies is the key, providing of course, it is done progressively and responsibly.
Article written by Bill Ryan, Director of Mastering Wealth and Ryan Home Loans 9/10/2007
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