If you have bought, or are in the process of buying your first home, congratulations! This is likely to be one of the biggest purchases you will make in your life. You now need to think about how to protect your investment in that asset.
Here are three things to think about…
Home and contents insurance
The most obvious form of protection for your new property is home and contents insurance. Insurance policies involve the transfer of risk. The insurer agrees to compensate you for a loss rather than you having to pay for that loss yourself. In return, you pay an annual premium to the insurance company for the policy. Look around for a comprehensive policy that suits your needs and will protect you from loss or damage to your new home and its contents, should accident or theft occur. After all, you don’t want to risk that new (and very expensive) asset that you’ve worked so hard to obtain.
Pay a bit more
If you are paying your home off, give yourself a buffer against further interest rate hikes in the coming years by paying extra into your loan now. It’s inevitable that rates will rise at some point, and paying that bit extra now will hedge against the full effect of rate rises that may come at an inconvenient time. Even if increased interest rates will not be a problem for you, increasing your repayments now helps to build equity in your loan account, and you might be able to redraw this money down the track.
Once you have a large debt (in the form of a home loan) you really must consider life insurance, if you haven’t already. Most people gloss over insuring their most valuable asset – their ability to earn an income. If that stops for any reason, be it because of an accident or serious illness, your assets and family’s lifestyle may be jeopardized.
Life Insurance isn’t just death cover, it’s a suite of products that includes trauma, total and permanent disablement, packaged life insurance and income protection. Talking about your financial goals with a licensed financial advisor is the first step towards asset protection and the peace of mind that it brings.
Now that you’re a property owner, or about to become one very soon, it’s reassuring to have all bases covered so you can get on and enjoy having a home of your own!