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Tips for Saving Money on Your Home LoanFor the vast majority of Australians the purchase of a home will leave them with the biggest debt they will incur in their entire lives. Not even a glamorous sports car will lead to paying off a home loan of several hundred thousand dollars. Home loans are also stretched out over long periods, meaning the actual cost of the loan is much more than what you initially borrow due to interest rates. It is nothing more than plain old common sense to do everything in your power to get the best deal you can on your mortgage. Here are five ways to save money on that mortgage:
Educate Yourself There are an incredible number of types of mortgage loans available, each with a dizzying array of rates and features. It is amazing how many Australians walk into a lending institution to get a mortgage pre-approval with no understanding of the market at all. In the modern world, learning the basics of the mortgage market is an easy task. Just get on the Internet and start reading. Learn as much as you can before you start interviewing different mortgage brokers and lending institutions. You’ll be glad you did. You’ll not only get a better deal at the beginning, you’ll also know how to ensure you maintain the best possible mortgage throughout the life of your home. Borrow Less than You Can Just because you have been pre-approved for a $400,000 mortgage, that doesn’t mean you have to go out and buy a $400.000 home. After you educate yourself you’ll learn current interest rates are near all time lows in Australia. You’ll know the mortgage you take out today will likely cost you more in the future as rates rise. Be prepared. Review Your Existing Mortgage Don’t make the mistake of many and get your initial mortgage and forget it. The mortgage market is constantly changing so keep up with it and take advantage of any money-saving offers that come up. Schedule Extra Repayments Smart consumers know they can save thousands of dollars over the life of the mortgage by making periodic extra repayments. Many establish the discipline of making an extra repayment every January. Live Within or Below Your Means Some people spend whatever they get as soon as they get it. A 5 or 10% salary increase disappears as soon as it arrives. This is a recipe for financial disaster. Although we live in a spending culture, people who best survive economic downturns are those who prepare for them by not living at or above their means. |
