How To Save Money With
Your Mortgage - Consolidate Debt Into A Home Loan - Refinancing and
Renting Out Your Home
April 30th 2006
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Refinancing |
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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.
Here are a few helpful strategies to help you save money with your
mortgage:
Debt Consolidation
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 much lower than those on unsecured debts.
If you decide to consolidate all your unsecured debts in with your
mortgage your monthly payments can be significantly cut.
This will enable you to pay a home loan interest rate on all your
unsecured debts.
A word of warning - do not forget that 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.
Varying Your Home Loan
After being in a mortgage for some years you may wish to request a loan
variation with your current lender. This should cost less than a full
refinance and may free up some of your home equity towards other use
such as purchase of car, a holiday, home renovation 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 rather than
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.
Mortgage Refinance
Where your existing lender does not have the loan product you are
looking for, mortgage refinance may be a good option. 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 is for mortgage refinance 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 Home
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.
If you would like
to learn more about saving money with your mortgage please visit
http://www.honeyloans.com.au or
http://www.webdeal.com.au
Maya Pavlovski
Freelance writer with
Bachelor of Commerce degree from Melbourne University and is a Qualified
CPA
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