You’ve obsessed about owning your home for a long time, and now you’re finally doing it. You got a home loan, and you’re among the many “borrowers.” Congratulations! In a few short years, you’ll have a place you can comfortably call your own.
As with most homeowners, your mortgage probably consumes the lion’s share of your income. You’re here because you don’t want to live the rest of your life massive debt hanging over your head. You want to get your title deed and be debt free as soon as possible. Here are ten mortgage saving tips guaranteed to ease your financial burden and turn your home-buying dream into a reality.
1. Save money for a down payment.
Average first-time buyers, in some cases, are required to part with a 20% deposit. This could mean having to come up with a whopping $15,000 -$20-000. Start by saving at least 10% of your income to save a significant amount of money to take to the closing table.
Post credit crunch, banks are more cautious who they lend to, so the bigger the deposit you can rack up the lower the risk that will be associated with you giving you access to a wider raft of mortgage saving deals.
2. Use mortgage savings comparison websites
Mortgage saving comparison websites offer comprehensive information about different mortgage saving companies and the mortgage saving packages they offer. These websites have recommendations from advisors with years of experience in the mortgage industry and best of all - they are free of charge.
3. Pay off your credit card debts
On the surface, it might not sound like a mortgage saving tip, but upon close inspection, it can save you thousands. This is all about increasing your credit-worthiness. Settling your arrears will free up cash to use on your mortgage, and it will also increase your credibility enabling you to borrow more money to finance your home.
4. Spread the cost through joint ownership
A married couple can acquire significant tax benefits by applying for a shared home-ownership scheme. They can take property and mortgage tax deductions on their joint tax returns which will reduce their home expenses and increase their mortgage savings in the long run.
5. Tighten your budget
Eliminating luxuries and channeling the extra funds to a savings account is an effective strategy to fund for your first home deposit or your monthly payments. Pay-per-view subscriptions, holidays, downgrading alcohol consumption, carrying lunch to work every day e.t.c could easily save you thousands of dollars in mortgage savings in the long run.
6. Ask for help.
There is no shame in asking for assistance financing your home. Your parents might help you with your mortgage savings by offering cash gifts for a down payment. Your friends can also chime in with interest-free loans to pay at your leisure. Either way, the extra cushioning will make the entire exercise much easier.
7. Learn how to track mortgage saving interest rates
Interest rates change frequently and sometimes unexpectedly depending on the state of the economy and the housing market. Don’t assume the initial rate the mortgage saver gave still stands. It could be completely different a week or a day later.
8. Refinance your mortgage
It’s possible your current mortgage is not conducive to your new financial position. It’s also possible that the housing interest rates have sunk. In such cases, modifying the terms of the mortgage agreement might be in order. Should you go down this road, the mortgage saver may require you part with a prepayment charge a.k.a penalty for breaking the initial agreement. If the overall costs are lower, go for it.
9. Ensure your insurance policies are in order.
The last thing you want is to fall sick and learn your compensation policy has been rejected for one reason or another. Going out of pocket for treatment can be costly and might knock you off course in your mortgage payments. You might even incur penalties. Ensuring your insurance documents are in order will help keep your mortgage savings high in the long run.
10. Seek alternative streams of income.
Are your finances stretched to capacity? Diversifying your income streams will eventually turn the mortgage saving numbers in your favor. You can convert your clutter into cash using sites such as e-bay. Freelancing, babysitting, and even tutoring can make the numbers add up in your savings account ultimately saving you thousands on payments.