Use Your Mortgage to Save Money

Use Your Mortgage to Save Money

By Maya Pavlovski | Loans |

So you have finally bought that home you were searching for. You have organized 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.The following are a few effective strategies to help you save money with your mortgage:

Consolidate your Debts
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 lower than those on unsecured debts.  Have you considered Debt Consolidation? By consolidating all your unsecured debts in with your outstanding mortgage your monthly payments can be reduced.Debt Consolidation can be a tool that enables you to pay a home loan interest rate on all your unsecured debts.Naturally 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.

Access Your Home Equity
After being in a mortgage for some years you may wish to access to the accumulated equity in your home. This should cost less than a full refinance and may give low-cost finance for a number of other projects and expenses such as home renovation, purchase of car, a holiday, 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 and not 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.

Home Loan Refinance
If after being with your lender for some time you have come to realize that they do not have the loan product that you are after Mortgage Refinance may be the way to go.

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 may be, you should be aware of the costs associated with a refinance. Therefore it is essential to 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 Family Home
While many readers may have a lot of trouble accepting this – 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.

Make More Frequent Repayments
Instead of paying off your mortgage monthly, switch to fortnightly or even weekly repayments.  Once you do your sums you will quickly realise that this simple change can help you pay off your mortgage sooner and save you thousands of dollars over the life of your loan.

If you would like to learn more about saving money with your mortgage please visit:
http://www.webdeal.com.au or
http://www.honeyloans.com.au

Author: Maya Pavlovski

Maya Pavlovski is an expert writer in the field of Finance and Lending in Australia. She is a regual contributor to a number of publications and websites. Maya holds a Bachelor of Commerce Degree from the University of Melbourne and is a qualified CPA.

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