If you are a home buyer, then you are fully aware of the pain that paying mortgage brings. Most of the money you are paying goes directly to interest, but there are actions you can take to make mortgage payment more bearable. Your goal should be to pay off the loan faster and to make the payments easier to meet.
Your mortgage is most likely your biggest expenses every month. At first, you might have thought that the payments are not that difficult to make on a regular basis, but there comes a time when it becomes burdensome. The trick that can help you involves money saving ideas in relation to your mortgage. Here are some tips to consider.
Cut Unnecessary Expenses
This is a basic personal financial management principle. If you do not seem to understand where all your money is going, then it must be because you are spending for items that are rather unnecessary. One of the common culprits is expensive coffee. Ordering coffee at least once a day leads to spending thousands of dollars every year. If you can cut down this habit, you can potentially save a considerable amount of money, which you can then allocate for paying mortgage.
You can also cut down on personal treats such as dining out and excessive shopping. Consider that home-cooked meals are not only more beneficial to your health but also to your financial situation.
Paying extra every month will help you pay down your mortgage faster. With extra payments, the amount will be applied to the principal instead of the interest. As the principal decreases, the interest payments also decrease.
Pay Every Fortnight
If paying extra is difficult for you, consider paying every fortnight instead, coinciding the payments with a fortnight salary. With this term of payment, you get to pay more often, therefore increasing the annual amount you are paying. With 26 fortnights in a year, you are actually making 13 monthly payments in a year.
Find a Better Deal
You should always review your loan to see if there are ways you can find better loan terms. For instance, it may be possible to get a loan modification to make the payments more affordable and suitable for your financial situation. It may also be wiser to get refinancing so as to get a lower interest rate.
If you need help with figuring out numbers related to mortgage, then you can contact us at Bunbury Real Estate. We have dedicated agents at our local Bunbury Real Estate office who will be happy to assist you with all your questions and issues surrounding the property purchase.