Q: I have inherited $70,000 and my husband and I have a combined income of $140,000. We owe $166,000 on our home and have no other debt. Should I put my inheritance in my super or should I look at an investment property?
A: You will need to see an accountant or financial planner for specific advice but I can make some general comments which might help you. Your age, financial or property ownership goals, time until retirement and size of your mortgage will also dictate which approach is best for you.
Based on the information you’ve given me, I have another option for you to consider.
I have always said, and firmly believe, that it is better to cut down your own mortgage on an owner-occupied property first. By doing this, the equity in your home will rise and then provides you with the chance to borrow against it to purchase an investment property. Paying off your mortgage will also provide peace of mind.
Through this method, you may then have the opportunity to purchase an investment property and enjoy the tax benefits associated with this avenue, which are not available to you in your own home.
But as I said, you should contact a financial planner or an accountant to get specific advice relevant to your circumstances. They can explain the pros and cons of putting your money into super as well as other options you may not have yet considered. A mortgage broker like Aussie can also assist you in weighing up your mortgage options.
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