Paying off a mortgage is the new Australian dream. According to MLC’s Australia Today report, almost 80% of Australians say outright home ownership is their most important priority.1

When you’re moving well towards paying off your mortgage, what steps do you need to take to make sure the next phase of your financial future is managed well?

Your end-of-mortgage checklist

  • Reassess your home insurance
  • Review your title
  • Review your estate plan and will
  • Assess your personal insurance situation
  • Think about your next financial steps. Check out our article - Should I pay off my home loan?

Three key priorities

There are three key practical steps to take well in advance of paying off your mortgage.

1. Buy the champagne and check the insurance

Your home is your biggest asset, so it’s crucial to make sure it’s appropriately covered. Research shows that 29% of homeowners don’t have home and contents insurance and 40% of households with insurance are underinsured.2

You need to have a realistic idea of what your home and contents are worth, as this is likely to change significantly over your years of homeownership – so if you face loss of damage to your home or contents, you could end up with a major financial setback if you don’t have the funds to cover replacement or rebuilding.

Want to know what your property is worth? Request a free NAB property report today.

The Insurance Council of Australia has a calculator to help you work out what it would cost to rebuild your home or replace your contents so you can make sure you have enough insurance to cover the costs.

2. Revise your title

When you have a home loan, the bank holds the Certificate of Title until the loan has been repaid. At that point, you need to remove the lender from your title. When you’re at the tail end of your mortgage, you need to discharge your home loan. If it’s not done properly, it can impact your ability to sell your property quickly and efficiently.

Here’s how it’s done:

  • Contact your lender – they’ll ask you to complete a Discharge Authority form (PDF, 257KB).
  • Complete and return the Discharge Authority form – it takes at least 10 business days to process your discharge, so think ahead if you need a quick sale or refinance.
  • Register your discharge and Certificate of Title – at the Land Titles office in your state. Your lender can do this for you or you can do it yourself. If you are managing the process, here’s where you’ll find the information you need.
  • Some titles are also held electronically now so make sure you speak to your mortgage specialist to find out if this is applicable to you.

New South Wales

Victoria

Queensland

ACT

Western Australia

South Australia

Northern Territory

Tasmania

3. Review your estate plan and will

If you don’t have a will, it should be one of your key priorities. If you die ‘intestate’ – that is, without a will – it creates a huge amount of complexity over your estate. The Court will appoint an administrator and this may not be the person who you would have chosen if a will was made. It’s a much more expensive and time-consuming process.

Working with a financial planner can make the process of putting your will together easier.

It’s also important to review your will and estate plan regularly and to update it if significant life events change your intentions regarding your estate.

These could include real estate purchases, marriage or divorce, the death of one of your beneficiaries or the birth a potential new one. Developing an estate plan can help you protect and arrange the transfer of jointly held assets, trust assets, and superannuation benefits. These types of assets are not dealt with in a will. For example, your superannuation benefits can be distributed at the discretion of the superannuation trustee. You can put in place ‘death benefit nominations’ to ensure super benefits go to the people or organisations you choose.

You’ve done so well with your mortgage – make sure you make it over the final hurdles easily.

Ready to complete your check-list?

Request a complimentary financial planning consultation

Or talk to your mortage specialist.

The information in this article should not be relied upon as financial advice as none of the information provided takes into account your personal objectives, financial situation or needs. NAB recommends you seek the counsel of an independent financial or legal adviser before making any investment or estate planning decisions.

(c) National Australia Bank Limited ABN 12 004 044 937, AFSL and Australian Credit Licence 230686.

Footnotes

1MLC-IPSOS, Australia Today report, 2016

2Canstar, Underinsurance Becoming More Common in Aussie Households, September 2016

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