Ways To Save Money On Your Mortgage
Saving money is a big deal for those looking to shave off their expenses and make life easier for themselves long term. Finding ways to save money can go from dropping a coffee per day to saving money on insurance providers. Either way, savings are the goal, and if you can figure out a way to save money on your mortgage, wouldn’t you want to do it?
The key is in knowing your options. When you are in debt, and you need to save some money, the first place wouldn’t be to look at your mortgage. You’d look to your smaller expenses; the ones that don’t cost you a house to change up! This is the most significant financial commitment that you’re ever going to make, so to know that you can make some savings on it will help you greatly. From discount points to remortgaging, there are options out there for everyone. Those who are in debt and using a debt management solution will be looking to find ways to save money on their mortgage. The thing is, as a mortgage is a priority bill, knowing you can save on it will mean that the rest of your budget is impacted. Even if you only want to reduce how much you pay each month, you’ll still be able to have more cash in your pocket.
The good news is that there IS a way to save cash on your mortgage if you look hard enough. In fact, we’ve got eight ways you can make a difference to what you pay every month for your home.
Move Off The Rate Your Lender Set
When your fixed rate mortgage term ends, you automatically move over to the variable rate as set forth by the lender. This is known as the SVR (standard variable rate) and it will mean that your payments increase. You’ll notice that this rate usually equals a much higher rate that you had fixed payments based on previously, and this is where you’d want to save money. If you are on a standard variable rate, you don’t have to stay with your lender. You can shop around to see whether you can get a better rate. Your current provider may even have a better deal for you. Sometimes, it’s just a case of asking and letting them know that you’re considering shopping around. When you enter into a new fixed deal, you won’t lose the money you’ve put into repaying your mortgage. This only happens if you increase your mortgage amount that you’ve borrowed over again.
Choose New Home Insurance
There are some cases where home insurance is tied in with your mortgage, and these deals look great on the surface, but in reality can be more expensive than paying for separate insurance. You are required by your lender to have home insurance, and this is true of every single lender out there. However, this doesn’t mean that your mortgage provider has to be the one who provides you insurance, too. You should work out what you pay on insurance and what you pay for your mortgage, and then you can figure out whether you can get your buildings insurance cheaper elsewhere and save cash on your mortgage payments. Always check with your lender first before you untie your insurance from your mortgage – just in case there is any fine print that must be adhered to. You have to meet the minimum requirements of your lender, and if their insurance is a must, you won’t be able to split the payments.
Daily Interest Is Cheaper
Did you know that mortgage deals that charge a daily interest are often cheaper than those that charge annually? Most people think they’re going to get a better deal with annual interest, and mostly they’d see that correctly compared to monthly. The thing is, every single payment you make for your mortgage is applied instantly, so when the interest is calculated, the balance at the start of a year is considered. This is why it costs you more in the long-term. However, if you swap to a daily interest, you’ll find that it’s cheaper.
Keep Reviewing Your Mortgage Term
When you pick to pay your mortgage, you can choose to pay over a long period of time. Most people opt for this as it means that their monthly payments are less and they can cut costs. This is an excellent option for cutting costs, but you should be aware that doing this will cost you more in interest over time. Always get the right mortgage advice before you make any changes. The main thing here is to keep reviewing your mortgage term. If you can afford to pay more and shave time off of your mortgage, you should do so to save interest!
Always Overpay Where Possible
This leads us to the next point. It’s not always possible for people to overpay on their mortgage, especially if it means that they’re unable to save any money (which is, of course, the goal!). Once you’re debt-free, you’ll be able to overpay on your mortgage and reduce the term. While you can, adding a little here and there to your mortgage will help you to chip away at it and reduce the amount you pay. When your payments fall on interest, you can then set the cash to one side and make extra payments on the mortgage. You have part mortgage payment and part interest, and if you can reduce the payments of your mortgage, you’ll reduce your interest month to month. Overnight, this won’t make a massive difference to your pockets, but if you take a step back and look at the bigger picture, you can see that this can save you thousands on your mortgage payments over time.
Find A Great Deal
Discount points and plans are the best way to save some cash on your mortgage. Start with mortgages that have a lower payment and gradually go up over time. You won’t regret trying them and you can often find some excellent deals, especially if you live locally to your mortgage provider. Sometimes, these deals will save you money over time and those are what you’re aiming for in your quest to spend less.
Keep Reviewing Your Budget
Keep looking at your monthly budget on payday. Where you’re wasting cash on subscriptions and coffees, utilities and other old gym memberships, stop doing it. Keep cutting your bills off that you no longer need to keep paying, and use the money that you save on these to add to your mortgage. If your budget allows you to save in some places and pay more in others, then you should roll with it. It’s going to keep your interest payments lower and over time, your mortgage is going to reduce, too.
Always Get Advice
Lastly, the most important thing that you can do for your mortgage, is to keep getting good advice! You need to get advice every time you want to look for a good deal, and you should always seek impartial advice where possible. Any decisions that you choose to make about your mortgage should be advised by an expert on the subject. Successful mortgage applications all depend on your credit. And you need the guidance of a good mortgage advisor to make the right decisions about which mortgage to go for, as well as which interest company to choose. You can save money on your mortgage when you speak to someone who cares about your mortgage as much as you do.