How To Save Money With Your Mortgage
By Maya Pavlovski
So you have finally bought that home you were searching for. You have
organised a Home Loan , have moved in and are enjoying your new life. As months
go on and the bills start piling up you are probably asking yourself is there
anything that can be done to help you meet all your repayment obligations and
still allow you to keep your own home. Naturally, the answer is YES.
Here are a few helpful strategies to help you save money with your
mortgage:
Debt Consolidation
If as well as paying your mortgage you are also paying off a number of
unsecured debts such as credit cards, charge cards, personal loans etc. – you
are probably paying too much every month. Interest rates on home loans are
generally much lower than those on unsecured debts. If you decide to consolidate
all your unsecured debts in with your mortgage your monthly payments can be
significantly cut.
This will enable you to pay a home loan interest rate on all your unsecured
debts.
A word of warning - do not forget that all your debts will still eventually
need to be repaid. If after consolidating you continue to accumulate lifestyle
debt on your credit cards – you may be living beyond your means.
Varying Your Home Loan
After being in a mortgage for some years you may wish to request a loan
variation with your current lender. This should cost less than a full refinance
and may free up some of your home equity towards other use such as purchase of
car, a holiday, home renovation or investment. In all cases if you have the
opportunity to borrow from your home equity towards any necessary purpose you
are better off to do so rather than taking out a personal loan.
If you are anticipating the birth of a new baby and expect family income to
be reduced for some time – a loan variation may enable you to make smaller home
loan repayments without being in default with the lender.
Mortgage Refinance
Where your existing lender does not have the loan product you are looking
for, mortgage refinance may be a good option. Some persons choose to refinance
from a variable to a fixed home loan rate where they are expecting home loan
interest rate to head north in the near future and would like to lock their
rates in at a lower level.
Another reason to refinance may be to take up a better mortgage than the one
originally taken out with your home. It could be that you are considering a more
flexible loan product which will allow a mortgage split, or a portable home
loan, or one that offers a super low honeymoon interest rate.
Whatever your reason is for mortgage refinance always check that the
refinance costs you will be incurring can be justified in lieu of the
anticipated savings and loan flexibility.
Renting Out Your Home
Sometimes the best way of keeping your family home is to rent it out. If you
suffer a period of financial hardship and are unable to maintain all your
repayments, renting out your family home may assist. You may be able to move
into cheaper accommodations for a period of time while you find your feet. If
you have family members willing to help, you may even be able to move in with
them for a while for free.
There could be tax advantages to holding your home as an investment property
even temporarily. To help you fully understand all the tax implications of this
decision it is always best to seek professional advise before deciding to
proceed.
If you would like to learn more about saving money with your mortgage please
visit
www.honeyloans.com.au or www.webdeal.com.au About the Author Maya Pavlovski has a Bachelor of Commerce degree from Melbourne University
and is a Qualified CPA.
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