You may have had to take out a home loan to make your home ownership dreams come to fruition. How, though, can you reduce that the financial burden of servicing that loan? What can you do if you wish to help take down the amount that you need to pay at present?
Here are some useful ideas that you should explore to help minimize your home loan burden. They may not all be perfect for you, but each one should provide some much-needed balance.
- Balance transfer of loan
Of course, you should first investigate if you can balance transfer what remains of your loan to a different form of payment structure. Consolidation of all of your debt is always a good idea and can be a convenient way to help make a home loan less cumbersome.
Take this into account, as it should go some way to helping you spend less money per month paying off all of your loans. By consolidating it with a balance transfer, you can then make one payment for each of your loans and reduce your admin fees and various other needless extras.
If you wish to make this work to your favor, then you should definitely look to transfer your home loan to a different balance. Now, you can easily keep track of all of your expenditure and know exactly what you are paying on a monthly basis, which is extremely useful.
- Pay more than is due
A fine way to help make sure your home loan is less of a kick in the teeth per month is to pay more than the amount that is due. This should help you to make sure that you are repaying more quickly when times are good. It will also help you to vastly reduce the amount of money that you see leaving your account in the first place.
This could help you to increase your home loan without making your life any less affordable. Don’t commit to something that you cannot keep up, though; if your income is flexible, make sure you are paying no more than 35% of your income on debts – including your home loan. When things are going good, though, paying a bit more is something you won’t regret doing.
- Extend the loan tenure
Some loans will also give you the option to try and extend the length of your loan. Say it was due in 10 years – some companies would be happy for you to pay less per month, extend it for another few years, and then enjoy a much more affordable payment plan. This is useful as it could make sure that you spend less monthly on the house loan, but it does mean that you are paying for longer. Tools such as the mortgage calculator from Rightswitch should help when it comes to working out what the reduced payments should be.
As ever, balance the cost of your home loan with the cost of getting an extension in terms of the added interest. If it’s affordable, then go for it.
- Refinance your property
One of the best ways to make your life a bit easier is to refinance your property. Many people will choose to do this as it could help you to make the loan a bit easier to afford. You can normally refinance a property within a year of the mortgage starting, but it really does depend on the terms that you agreed upon.
- Reconsider investments that you make
Of course, one way to make your home a bit easier to pay off and afford is to consider the kind of investments that you make. From monthly investments into things like stocks to the way that you manage your portfolio, you can reduce your home loan costs if you simply reconsider the kind of investments that you have been making.
Refinancing your property is a big thing, and it should be something that you consider quite seriously. It could be the ideal way to help you get your home loan at a lower rate, which many companies can offer you. Moving the remainder of your loan to this new company is a decent way to help get the costs down and to make the cost of your home a touch more affordable in the long run and is well worth your investigation.
To do that right, then you should absolutely look to take part in a changing of how you go about your investments. If your investments are returning less than the value of your monthly home loan cost, they should be reconsidered. Sometimes, that investment could be better used to help pay off the loan in the first place. It could be put towards repaying the loan so that you are paying less from the pot of money that you already had put by, thus reducing your stress from month-to-month.