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How To Save Money With Your Mortgage - Consolidate Debt Into A Home Loan - Refinancing and Renting Out Your Home

April 30th 2006

How To Save Money With Your Mortgage - Consolidate Debt Into A Home Loan - Refinancing and Renting Out Your Home


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

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Maya Pavlovski
Freelance writer with
Bachelor of Commerce degree from Melbourne University and is a Qualified CPA

Books on Lending

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Important:  The material on Best Syndication is for informational purposes only and is not meant to be advice. You should always seek professional advice before making financial decisions. 
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