“Mortgage” isn’t always a word that families like to discuss at the dinner table and yet it’s something that we all must discuss in order to survive. The topic of home loans is one that be frustrating as you can be locked into paying your home for the next forty years instead of the ten. There is an alarming statistic which states that household debt to income is around 189 per cent, meaning the average individual owes almost twice what they earn each year.
That’s why families focus solely on paying off their loan before they make the decision to invest further; yet what they don’t know is investing earlier could reduce their mortgage in length of years. As this process take’s into consideration the tax system and the advantage of borrowing to invest.
What is debt recycling strategy and why should we consider it?
Debt recycling is a funny word and it may even make you think what! I need to go into more debt to live? This is not the case as this strategy builds wealth and takes surplus capital or cash flow to reduce bad debts (inefficient, non tax deductible debt) and looks at substituting it for good debt (efficient, tax deductible debt) and takes on the method of an investment loan.
Using equity in your home you decide to use an investment loan to purchase other investments. The concept is that these investments over time will grow and also provide an income to accelerate the repayment of the debt within your life.
There are some associated risks within this process and it needs to be set up and done correctly, with the right investments, and that’s why our friendly team would love to speak with you about how we can help you reduce your mortgage and boost your investments on the Gold Coast. For more information fill out the form below.