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Many of us make paying off our mortgage a priority. It’s the new Australian dream. But before making that last home loan repayment, use our checklist to make sure you’re prepared.
There are three key practical steps to take well in advance of paying off your mortgage.
Your home is likely to be 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 underinsured1.
You need to have a realistic idea of what your home and contents are worth. This is likely to change significantly over your years of homeownership.
If in the face of loss or damage to your home contents, you don’t have the funds available to replace or rebuild, it could mean a financial setback.
Want to know what your property is worth? Request a free NAB property report today.
Want to work out what it could cost to rebuild your home or replace your contents? The Insurance Council of Australia has a calculator you can use. Then you can make sure you have enough insurance to cover the costs.
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:
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've 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.
1 Canstar, Underinsurance Becoming More Common in Aussie Households, September 2016
The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.
(c) National Australia Bank Limited ABN 12 004 044 937, AFSL and Australian Credit Licence 230686.
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