With the current mortgage crisis gripping the whole world, and foreclosures still going on at an alarming rate, your mortgage may be at the top of the list. The stress is affecting people everywhere, but you can’t let your loan control your life.
The Crisis Isn’t Over Yet
Though economies around the world are showing signs of recovering, that does not mean we’re out of the crisis yet. Foreclosures are still continuing at an alarming rate, and the stress of keeping up the bills is affecting many people around the world. Here are eight tips to help you beat the heat:
Get Your Loan Right: Consider Refinancing
Is your loan full of a lot of fees you don’t want or little features that you’re paying for, but don’t need? Check out refinancing to get the terms of your loan worked out to be more beneficial to you instead of the bank. Try making a list of all the things you want, as well as those you don’t and speak to a lender or mortgage broker about what you can do to get what you want (and get rid of what you don’t).
Cut Back Your Personal Spending
Cutting back even a little big on your personal expenditures can make paying your mortgage a whole lot easier. Try things like taking your lunch to work, making your own coffee, use the library instead of buying books and try travelling locally instead of going on an expensive foreign vacation. Every little bit of money you can save helps you in your goal.
Go Fixed Rate
Tired of your adjustable rate and want to know exactly what you’ll be paying on your mortgage each month? This can be a great way to ensure that you’ll be able to pay it. Look into your options for fixing the rate on your mortgage. Want to take your chances and hope you might pay a lower rate later? Only have part of your mortgage fixed, and continue with the rest of it still adjustable.
Renegotiate Your Interest
Since the home loan market constantly changes, you may be able to renegotiate your interest rate with your lender. This is easier if you’ve had the loan for a few years. Talk to your bank or broker to see what they can do for you.
Ask For Help
Your lender has a variety of tools at their disposal to help you out. Particularly on long term loans you may be able to:
- Defer some of your payments (typically 3 to 6 months)
- Extend the term of your loan, lowering payments
- Change to interest only repayments
- Renegotiate your interest
Talk to your lender about your options if you need help due to the loss of your job or other extenuating circumstances.
Discipline, Discipline, Discipline
Always think before you spend. Is it necessary, and can you really afford it? If you can hold off, especially on major purposes, do so. It’s better to save up for something expensive than to hurt yourself by buying it right away.
Always Be Prepared
Are you planning to start a family or make renovations to your property? Make sure you plan ahead for any loss of income or extra expensive and know how they’ll affect your mortgage commitment. You can also use an offset account that is attached to your mortgage by having your salary paid into it, and using your credit card for purchases. If you’re disciplined, you can then save money on interest by having the money in your offset account until your credit card is due, then paying the bill using the money in the account.
If you’re worried about the economic decline and your job security, check into income protection and life insurance policies. These products cover you and your family in the event you should lose your job or your life (and by so doing, your income). This will allow you, or your family, to make the required payments, whether you can work or not.
This article was written by William from Home Loan Finder.