Talking about money and debt is never an easy conversation.
Planning your finances and managing a budget is considered by many as a chore, and a bit boring. Taking to a financial planner can help you understand your money a little better and we can assist you in making the right decisions to improve your financial wellbeing.
Refinancing or consolidating debt is a smart way to reduce interest and cost you a little less over time. Whether this is switching credit card debt and store cards to a personal loan or taking advantage of record low interest rates to get the best deal for your mortgage can save you a good deal of money. Over 30 years, the difference of 0.25% in mortgage payments might mean a difference of $15,000 over the life of your mortgage.
By having multiple different finance agreements in play at once, means you are paying interest on each one of these. It’s also incredibly overwhelming trying to understand and manage repayments on different days of the month, and chipping away at a number of different avenues of finance can feel like you are never getting ahead or making inroads on the mortgage at all. By combining your finances into one monthly payment means it is easier to manage, you will pay less in interest and you take better control.
“We don’t advise rolling other finance products in to your mortgage – you will end up paying them over a much longer term and they may cost you more.”
If you have a 5 year loan, for example, rolling it in to your mortgage may mean it becomes a 25 year loan, costing you less in monthly payments but more in the duration of the loan.
We always will suggest that even if you roll your debt into one manageable payment, keep paying what you were beforehand. For example, if your finance and loans were costing you $2000 per month, and a consolidation loan is at $1500 per month, keep paying that extra and you will get the loan paid quicker, providing you with more financial freedom and a real sense of accomplishment.
With refinancing, you wont end up with less debt, but you may find you pay less interest and pay off the debt quicker. Always seek advice before making these decisions yourself. Getting financial advice to manage your debt forces you to be honest about your financial position. We will lay everything out with you, understand your position and your cash flow and help you to determine your options.