Four ways a mortgage broker can make debt work for you

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Want to improve your financial position but don't know where to start? The first step should be to enlist the help of a mortgage broker. These dedicated professionals can help assess and manage debt portfolios to enhance financial position.

Electrum Finance founder and mortgage planner Adam Solano has been working in the finance industry for 15 years.

Assisting his client's to manage their debt portfolio is the most satisfying part of the job for Adam.

"Personally what I love is offering people a choice and value when managing their debt portfolio which might have been neglected or mismanaged," Adam said.

"Managing debt can help people get closer to retirement or start an investment portfolio."

When it comes to helping his clients manage their debt portfolio there are four main areas of focus.

One: Reducing interest payments

Loan consultation, comparing different borrowing options and changing lenders if the value is there are a few key ways to reduce interest.

While there might be a lot of offerings advertised boasting low interest rates further investigation is required to reveal the true cost of switching.

Generally there are establishment fees, the interest rate might change after an introductory period and some offers have very narrow credit policies so few people actually qualify.

A professional is able to compare products and offer their clients a true indication of the worth of any loan product.

"A mortgage broker is able to compare apples with apples, it's a very important part of my job," Adam said.

"It's easy to get overwhelmed with options when you don't have the skills or tools to compare them accurately."

Two: Maximise cash flow and control

If you have multiple loans, credit cards, a mortgage and a car payment, what should you pay off first?

Paying off non-asset backed loans like that personal loan for a holiday or credit cards that aren't paid off in full each month are the best place to start.

The most important thing to do is review and not set and forget.

"People are staying in debt longer than ever before," Adam said.

"If your debt is an afterthought or if it's neglected for 10 or 20 years that can equal hundreds of thousands of dollars."

Three: Think to the future

The future and the unknown need to be part of the debt management equation.

This is more relevant than ever with the recent spike in cost of living and building costs.

It's good practice to review insurance policies every six months to ensure they still meet the needs of the debt portfolio and cost of rebuilding.

This includes income protection insurance, life insurance and home and contents insurance.

"Life is unpredictable and there are a lot of things outside of your control but planning enables us to sleep well at night," Adam said.

"Make sure your insurance policies are calibrated for unforeseen life events so you and your family can continue on covering repayments.

"We can't recommend insurance specifically but we can have an in depth conversation around it and encourage our clients to review regularly."

Four: Thinking outside the box

There are some things only the experts, like accountants, know like when debt can be used as a tax deduction.

"No two debts are the same and they're not always equivalent dollar for dollar," Adam said.

"We want to make sure your debt portfolio is working for you and not the lenders by optimising debt and lowering interest."

When viewing debt overall Adam uses the analogy of pushing a table through a pool of mud. There is too much surface area and it doesn't go very far after a lot of effort.

This is the same with various debts and high interest.

But if you can collapse the table down to a stick then pushing that through the mud is much easier and faster.

This is how debt can feel after working with a professional to focus on lifestyle and consolidating loans for lower interest.

"We want to get debts working for you," Adam said.

Learn more about Electrum Finance or contact Adam to manage your debt today at the website.