Very regularly finances can be overwhelming and it can just seem easier to leave them running in the background and not worry about them.
The problem with this tactic though is that it’s likely costing you while at the same time benefiting your lender.
Here is a quick checklist of questions you can ask yourself about your finances. Any you reply yes/no to means there are financial benefits likely to be gained:
- Is my credit card paid in full each month?
- Will my HPs be paid off before the end of my interest free period?
- Is my mortgage 100% fixed?
- Am I paying any more than the minimum monthly repayment on my mortgage?
- Is my income offsetting the interest on my mortgage?
Now that you are aware that there are issues with how your finances are organised, what is the next step?
Some of these things you can correct yourself, especially the credit cards and HPs as long as the balances are not too big. Others, such as changing your mortgage structures, you may require advice for. If your mortgage is 100% fixed there may be break costs associated with changing it and you want to understand the benefits of any changes and how they can help improve your position. The break costs are easy to find but the cost of not breaking can be more difficult, and may be more relevant.
The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.
