We’re in our early 50s. Should we pay off our mortgage, or wait?
My wife and me, the associated mortgage, we are in the process of selling an investment property that will allow us to pay our home mortgage and leave us with more savings of $ 100,000. I’m wondering if we’ve done the right thing that repays our home loan as much as it is great to be without mortgage.
If we should keep the loan open and keep the parking funds as an offset or similar, so that we have access to investment or if something emerges. Our united income is about $ 250,000 PA. I am in the middle of the fifties and my wife is forty.
Since it is mortgage, there is a lot to say, but keeping your loan exist can be an attractive option.Credit: Eamon Gallagher
Thank you for your question. If you park enough funds in the offset account to fully balance your mortgage, there will be no interest expense, and therefore the only cost associated with your adoption of this approach will have monthly or annual credit fees. Provided that these are not too high, this can be a good way to maintain a little flexibility.
Considering your age and income, I doubt that you will have a lot of problems in getting another loan for investment purposes, if that’s the way you choose to go down.
However, since the bank needs to work within the responsible lending guidelines, it becomes increasingly difficult to get loans as you get older. There are also costs of credit institution. For these reasons, it can be attractive to keep a credit facility open and accessible.
Apart from bank fees, the only thing to be aware of is the necessity for personal financial discipline. I saw people who kept the loan open and then burned the offset account in his pocket and encouraged to spend places where they would not be otherwise.
If you have a chance to be sensitive to this trap, it may be better to eliminate the loan to eliminate this charm.
We closed our SMSF a few years ago. How long we need to keep the documents and what we need to keep, so all receipts and so on.
Verify this with your accountant because they are tax experts, but when my understanding should be kept for 5 years, including annual returns and audits, trustees should be kept for 10 years such as minutes, notifications and investment strategies.
