To know what you truly want in a loan is easy. Forget the hype and the marketing names like Professional Packages or Plan and Simple loan propaganda, also do not worry about what your friends and family are doing. Do not get me wrong it is always good to listen, but then you have to analyse your position and needs compared to the friends and family members. It is much simpler to think what do you want to do. Do you want to payoff your property quickly or do you want to go out a lot and just pay the minimal payments. What is your plan for the next few years? By defining your own needs, you can define what you what in a loan.
Planning is the secret.
A plan is not hard, it is simply putting down what you want to achieve, how you expect to achieve it and having some sort of measure to see if you have achieved it.
You will see as you go through the different parts of our website, that we are great believers in examples. So here is an example, and then I have given you a template to do your own. I am a great believer that if you plan you cannot fail, the plan can change, it may take longer, but if you read it once a week keep your eye on the ball, it will happen. The only time a plan does not work is if you forget about it. So, do not just write it and put it away. Write it in your diary or on your mobile device anywhere you can get to it easily and read it weekly, this keeps it fresh in your mind. Do not forget this is your plan, no one except you needs to see it, so be very honest with yourself.
Why are you obtaining a loan?
To purchase a home, somewhere I can be me, have my friends around, get a dog and maybe bring up children.
How long do you what a loan for?
Well I am 40 years of age now, I want to pay the loan off or have a very small loan by the time I am sixty.
Are you good with money?
Not really, I am 40 always have had good jobs and this is my first house.
Is this really what you want?
Yes, I have traveled and done most things on my bucket list. I want to have some stability, know my neighbors. I am at that age now, I want a place to call home and feel safe.
How will you achieve this?
Using the home loan payment calculators, it works out my loan of $360,000 at 6% variable interest over 30 years my min payment is $2,159 pm.
If I pay fortnightly $1,090 I will have the loan paid out in 24 years.
If I pay fortnightly $1,190 I will have the loan paid out in 20 years.
Can I manage this?
I believe I can put $1,200 per fortnight on the loan because if I need the funds back I can use redraw. This gives me comfort, because if I lost my job or needed something urgent the money is available and if it stays there I met my goal, win, win situation.
How will I know how well I am doing?
I will know how well I am doing by seeing the amount in redraw grow, and on my statement and on the internet looking every month and seeing expected years left to pay.
If I can, I will also put on any extra money, like tax refund or eBay sales. If I can pay the loan out even earlier, then I have more money as I get older and can either put some extra in super or just not worry about jobs and utilities and things going up in price as much.