Feeling nervous

I agree with considering income protection now that you have a mortgage. If you can afford it look into trauma as well. The premiums for income protection are high but tax deductible. You may need to look into your expenses and really cut down on what are the non-essentials. I don't know what occupation you are in. When I did mine up, as my skills are very specific, I made sure my income protection is for OWN OCCUPATION (as in if I can't do my job, they can't make me look for all other sorts of work), and pays out to age 65 at least. You may want to see a broker for that and certain brokers are familiar with certain industries and they can help you assess your needs. If you are really thinking of doing it, do it while you are young and before you develop anything that they can use to exclude a whole bunch of conditions in your insurance. It must be tough but it will pass. I wish you all the best.
And Chermside West and its surrounds are very nice areas. I am biased but I think there are a lot of positives for that area. Good public schools and private schools nearby, close but not too close to a fantastic mall and amenities, quiet, wonderful bike paths, the nature reserves, beautiful streets and houses. There are some townhouses development and I hope they bring in the population, but not too much, to attract more amenities like boutique cafes and restaurants. If they get the North West Transport Corridor sorted soon to ease the congestion I think it will be very desirable.
Take some time out for yourself, enjoy your house which is now all yours to personalise as you please and take care of yourself. If you are a nature person, well, you are in the perfect spot.

 

Looked up the stats.

Average room rent in Chermside is $194/week. I am unsure of the condition of your place. Click around on flatmates.com and see what your 'competition' is.

There are 6 people looking for every bedroom.
This is reasonable. Would take 1-2 weeks to fill each room from my experience with areas sharing those stats.

Definitely furnish it with the basics. Bed, bedside table, wardrobe. No sheets, or tv. Costs about $500/room and gets great returns.

Perhaps rent all the rooms, and rent somewhere fun and funky, or whatever works for you.

 

I appreciate it isn't easy but try not to get too caught up in the turmoil of current events, just ride them out. Things will get better.

I tell myself every day to appreciate all the good things in my now widowed life (nice townhouse, lovely daughter, great friends). There are plenty of people far worse off.

best,
Jockosaurus

 

"Little miss muffet , sat on her tuffit, stressing her days away"
"Then along came Clyde, who sat down beside, and put all her worries at bay"

Firstly , it looks like you can pay the mortgage and that is all that really matters for now. You asked in your post 'have I done the right thing ?' The answer is yes you have. Firstly buy buying out your partner it shows you have confidence, determination and goals for the future. So much respect to you for that and well done.

You need to remember you are quite young, and most likely have a 30 year loan, and in a few years you could refinance at another 30 year loan if you need to or if rates were to rise. And then in another few years time you could do that again if need be, reducing your repayments even further. And you asked earlier I think about paying it down quicker. You could get a couple of nights work somewhere or a weekend to repay some of the principal down sooner. Every extra bit you pay will keep bringing down that weekly repayment more and more. So perhaps focus and concentrate on doing that for now.

Now you said you worried about all the talk in the papers of falling prices and that your anxiety was keeping you awake at night. I assume mainly from all the talk of falling prices. Do not worry, I have a cure.

I will give the cure in a moment but will first mention your anxiety and sleep deprivation. Anxiety is basically a fear of something that you think MAY happen in future, something that may NEVER happen. The word anxiety derives from the word anxious and is a normal human emotion. A fear that one may feel when going for a driving test for example. Nothing bad is going to happen but for some reason we feel that way. And so we could say some anxiousness is more justified than another. So basically what you have is a fear of something that may never happen. And even if these fears were realised , as I will show soon, things may not be as bad as you think. They may infact be better for you.

Before I focus on that I will mention sleep. If you are having trouble sleeping you need to retrain or refocus your brain as such. You need to tell yourself that sleep time is for sleeping and if I do want to worry I can do tht during that daytime as their is plenty of time there. Worrying about anything is not going to be fixed by staying awake worrying only to have a ****** day after being deprived of sleep. When it comes times to sleep you need to forget about EVERYTHING, just tell yourself that now is my sleep time and that if I have anything to worry about I have all day tommorow to do that, when I am awake.

Now hopefully we can put your night time and daytime anxiety at bay. Before I go on I would like you to picture what you would have bought if you had a million dollars to spend on a property. That one with the nice pool and surrounds and spa, the nice views the beutiful kitchen exactly how you would want it. That one you would of bought if you had of had a million to spend.

Now , lets just say we fast forward and you are in your 40s and the place is paid off or pretty close to it. And you are now thinking of upgrading to that million dollar property we mentioned above.

Now let us see what happens if prices rise or fall in future or if they were even to stay the same and see if what think may happen would be all that bad......

Let's just say your property is now worth 600k, and that one you really like is 1 million.

If prices went nowhere in fifteen years, you could sell your place and buy the 1 million dollar one. So you would need to take out a 400k mortgage to upgrade to this 1 million dollar property.

Now lets say that over fifteen years, prices rise 50%. So now your 600k property is worth 900k, but that million dollar property would be worth 1.5 million dollars. If I sold my property to upgade I would now need to take out a 600k loan to buy this property. But as we saw above, if prices went nowhere, we would of only needed to take out a 400k loan to upgrade.

Now let us look and see what would happen if prices dropped 50% over this time. Your 600k property would now be worth only 300k, but that 1 million dollar property would now be worth only 500k. So now if you sold your property to upgrade to this once million dollar one, you would now only need a 200k mortgage to upgrade. Not 400k if prices go nowhere, or the 600k it would cost if prices rose 50% over that time.

As you can see, upgrading in future will be cheaper for you if prices were to actually fall over that time. Much cheaper than if they rise. It is nowhere near as bad as you think, it may be MUCH better for you. You just need to change how you are looking at things. As long as you can pay your mortgage and hopefully the principal and hopefully a little extra you will be fine. Just paying that little bit extra can reduce your mortage by five or 10 or more years. Think of every dollar as a soldier that works for you. And make sure you put those soldiers to the best use you can.

All the best, good luck, and enjoy your sleep. You will be fine.

 

Be very wary of I-select and other comparison sites.

They don’t compare ALL options, just those prepared to pay their hefty commissions.

And there are other traps.

We used I-select many years ago to compare health insurance. They chose the “best option for us” and we did save money. But what they did NOT tell us was that their site chose a lower level of cover compared to our original policy. We only found out by accident when checking before a possible hospital stay. Then we had to sit out a 12 month waiting period to bring us back to the cover we believed we had, the same as our previous cover.

Sure, use their online check lists, but arrange any policies directly with the company. And ask plenty of questions.
Marg

 

I could of used further extremes in the above examples.

Do the sums and see what happens if prices doubled over that time. The upgrade would cost 800k. And If prices doubled every seven like the old days, these prices would be fourfold over fifteen years. The upgrade cost would be 1.6 million.

On the other, if prices fell 75% over that time the upgrade would only be 100k.

Maybe people are looking at things the wrong way.

 

I just discovered someone who writes longer pieces than I do.

 

That was only the introduction.

 

Thank you so much for your insight. Agree that sleep deprivation definitely needs to be addressed. It’s certainly been the catalyst for much of my anxiety. And you have reassured me that buying the house isn’t the craziest idea. Seeing the numbers as you put them is a huge help. Thank you again.

 

I didn’t know that. Thank you so much for telling me. Will shop around myself.

 

So very true.

 

I don’t know the address of the property, but I would be surprised why she need to rent $425 PW. I would imagine a property in Chermside West with $660k valuation could be easily rented in between$490-$550 PW. $425 PW is off the radar as this is usual case for DOMAIN.

 

That $425 a week rental is for a 3/1/1 lowset that backs onto a very busy main road. (look in realestate.com.au)

 

You are very welcome MissMel.

Your bad sleep and anxiety are sort of feeding off one another. Where one makes the other worse. Like a viscious cycle. And once you do settle down, they will both improve with each other in the same way.

And as you can see, things are not as bad as you thought in your situation. And may very well be to your benefit in the long run.

All the best MissMel.

 

There was a meeting at work yesterday where salary sacrificing was promoted. I was told you can salary sacrifice your mortgage. Does anyone have an opinion on this?

 

The only person's opinion on that one worth anything would be a tax accountant. Check with your colleagues at work and find an accountant that is familiar with your industry.

This is one of those instances where paying for advice is well and truly the go.

Good luck!

 

My wife currently does this, her employer supports salary sacrifice through a third-party and they pay our mortgage tax free up to a certain amount every paycheck.

It's super simple, she recieves 2 seperate paychecks, one is regular PAYG witholding tax payment and the second payment is exactly the same but the tax is paid to us, not the ATO. It's a handy $300+ extra per paycheck.

Keep in mind not every industry allows this, check out one of the third-party companies that do salary packaging and have a read through what they offer, how they work etc..
Salary Packaging | Maxxia

P.s. I am not associated with the above company, its just the one my wife uses.

 

Salary Sacrificing is often worthwhile. Take a look at what fee the SS company charges you for their service and as noted, confirm that this is suitable for you by consulting your accountant. Check if it will affect your "Income" when taking out the new mortgage.

 

An alternative to salary sacrificing into a mortgage, would be a PAYG amendment form, which adjusts the tax that your employer deducts in your salary, rather than get a large refund at the end of the year.

You would get more control of your money this way, but you do need to justify it up front.