When Two Becomes One

Getting engaged is the beginning of a whole new chapter in most people’s lives. For many couples, planning the wedding is the first big step of their joint future.

Amongst the celebrations and excitement it is easy to overlook some fundamentals of life together – such as how you will manage your money.

Taking tme for honest commnication and some simple decisions now will pay off for not only your finances but could also positively benefit your relationship in the long run.

The Wedding Budget

According to ASIC the average Australian wedding costs $36,2000 in fact, one in four couples are delaying their weddings due to the cost.

Gone are the days when parents paid for most of the wedding. With changing family structures, delayed marriage to pursue careers and more couples cohabitating prior to marriage, anything now goes on the wedding budget front.

You can still have a wonderful day without massive expense. Most imprtantly, decide on the sizeand type of wedding you both want, how much it will cost and then decide on a savings plan and the time required to make it happen.

Be very clear from the start who is paying for what so you don’t have any nasty surprises as the day draes closer!

Discuss Joint Financial Goals 

Do you want to travel overseas but your partner wants to buy a house as soon as possible? Your life plans must now co exist. Communication and occasional compromise are the keys to building a financial future together. Ensure you both agree on what you want and when. Prepare a budget and savings plan to help with your goals.

Joint or seperate accounts? That’s entirely your choice – but the best strategy to keep your fnances on track is to talk to each other! Regularly discuss bills and savings so you both know whether you are on track to achieve your goals or if you need to work together to adjust your plans.

Post Wedding Reality 

The excitement of the wedding will soon be over and two individuals become a family. Anything that happens to one will directly affect the other so it is essential all of your important documents and policies are updated to reflect your new married status and married name (if you have chosen to change your name). These isues are often overlooked until a crisis occurs that reminds us of their importance.

Will, Insurance and Super 

Create or update a will – this avoids a lot of hassles furhter down the track.

Check or update yur insurance – update policies from single to married status. Update or look at taking out life and/or income protection insurance to provide for your spouse/future children should the unthinkable occur.

Review your superannuation – uodate beneficiarydetails and discuss how you can help build your superannuation together.

What Else?

The list could be vast! Other documents and providers that may need to be changed include:

  • Marriage Certficate
  • Passport
  • Driver’s licence/car rego
  • Bank accounts/personal loans
  • Australian Tax Office
  • Electoral enrolment
  • Medicare
  • Centrelink (if applicable)
  • Doctors/dentists
  • Counci (rates notice)
  • Bond authority (for renters)
  • Memberships etc

The all important mortgage!

If one or both parties already have a home loan and wish to refinance it is absolutely vital to have all the required documentation prior to commencing the process. Don’t forget your existing title deeds will also need to be updated.

If you are preparing to apply for your first home loan together it is equally important that all required documentation reflects your new marital status and name.

As a minimum you will require 100 points of ID in your new name including:

  • Marriage Certificate
  • Medicare Card
  • Driver licence
  • Passport etc

While not a requirement it os recommended you have the documents certified to avoid delays once they are in the lender’s hands.

It is essential you cntact your mortgage broker to discuss the process BEFORE lodging any loan application documents. 

Phew – there’s a lot to think about? But above all make sure you enjoy every moment of this exciting time in your life.

What’s the secret to buying my first home?

Saving for it.

Saving for a home loan or mortgage isn’t glamorous but it has to be done. So here are some savings tips for first home buyers to help get you into the property market.

How much should I be saving?

One of the first rules of saving is to set a goal. But what should that goal be? Different people have different needs, but a rough guide is that you should be saving 10% of your pre-tax income. Not saving anything like that? Read on.

What are you spending?

To help with saving, you need to know what you’re currently spending. And not just on the big items like rent, utilities and groceries. Get yourself a notebook and every time you spend money, write it down. Everything. For at least a month but preferably longer. You’ll be surprised where your money goes.

What do you really need to spend?

If you’re a typical first home buyer, you probably haven’t been exercising a lot of financial restraint to this point. Invited out to dinner? You go. See shoes you like? You buy. Take lunch to work? Are you kidding? There’s nothing wrong with that, but if you really want a home, you’re probably going to have to start making some sacrifices. Look through your spending record and decide what you’re willing to give up. You might decide, for example, that life would still go on if you didn’t spend id=”mce_marker”500 a year on coffee.

Get rid of credit card debt

You probably used to pay your credit card off every month. But then one month you couldn’t quite manage it and things snowballed from there. That credit card debt is killing you. It is expensive money and you need to eliminate it. Consider transferring the debt to a new card that gives you an interest-free grace period, and save like mad to get your balance down to zero as soon as possible. Then consider the old trick of keeping your credit card in a cup of water in the freezer.

A savings history

If you’ve spent everything you’ve earned – and then some – don’t be surprised if the mortgage market doesn’t put out the welcome mat. lenders like to see proof that you can save. So start putting something aside every month and you’ll be surprised how quickly it adds up – and how much more popular you’ll be among the lenders. Want more savings tips? Talk to Indigo Finance today.

When Would I Refinance My Mortgage?

Whenever it makes financial sense to do so.

Heard about mortgage refinancing? In the past, most people who took out a mortgage doggedly continued with it until they had paid it off. These days, people refinance their mortgage much more frequently. The average duration of a home loan in Australia now is just 4-5 years. Here we look at some of the reasons people in Australia refinance their home loan.

Mortgage refinancing reasons: lower rate

The most common reason for people to refinance their mortgage is to get a better deal. But be careful you don’t become interest rate-fixated. When you refinance your home loan, you need to consider fees and charges as well as the interest rate. You often have to pay charges for exiting your current home loan, plus charges for taking out the new mortgage. You need to be sure that in refinancing your home loan that you’ll be better off in the long run after taking into account all costs.

Mortgage refinancing reasons: more flexibility

Many people only discover the full details about their mortgage when it’s too late. They try to do something and get told by their lender that either they can’t do it, or they will incur a hefty charge if they do. An example is a redraw facility – the ability to pay extra money into a mortgage and then redraw it later. This feature is not possible with a basic home loan, so many people refinance their mortgage to give themselves this sort of increased flexibility.

Mortgage refinancing reasons: renovation

If you carry out renovations, it often makes sense to refinance your mortgage and take out a construction loan so you only pay interest as building progresses. Once construction is over, it might make sense to refinance your home loan again so that you consolidate the total amount you owe into a loan that minimises your interest bill, while giving you a degree of liquidity.

Mortgage refinancing reasons: home equity

Over recent years in the property market houses have appreciated at a significant rate. e.g. a home you bought for $300,000 five years ago, might now be worth $500,000. Refinancing your mortgage with a home equity loan might let you tap into that extra $200,000 equity.

Mortgage refinancing reasons: defaulting

Some people find they have borrowed more than they can comfortably repay, and they’re in danger of defaulting. There’s no shame in that. But don’t suffer in silence. If you’re having trouble making your mortgage repayments, talk to Indigo Finance about refinancing your home loan to make it more manageable.