Last Updated on Mar 25, 2020 by James W
You are well on course to purchase your dream home and have already started seeking the mortgage options. However, like most of the borrowers out there, you simply wouldn’t like to remain a borrower for the rest of your life. From the time you apply for the loan, it might as well be a long journey till the time you secure the title deed from the lender. However, there is no need to despair. With the help of proper planning, you can definitely save up a lot of money by paying off your loans faster (i.e. sans default, late fees, fines etc). Read on to explore how you can save money while having a mortgage.
Step up your fiscal literacy
It will not really be an exaggeration to claim that a mortgage is the biggest financial responsibility of your life. You need to ensure that you are actually acquainting yourself about the various aspects of mortgage:
- How a mortgage works
- Who are the leading lenders offering mortgages?
- What are the prevalent mortgage rates today?
- What are the tax merits of having a mortgage?
- Are there benefits of paying up faster?
Settle for the standard 25-year loans, if possible
It would be better to understand how these loans work- in a bid to find out why we are saying that standard 25-year old mortgages are preferable. The minimum monthly mortgage repayments on loans are calculated on the total amount of money required every month to pay off the principal, the balance on the loan and the interest accrued on that balance. As already mentioned above, a standard loan term covers 25 years. The shorter the loan term, the higher is the rate of interest. Even if you think that you can actually clear off your debts in 10 to 15 years, it would only be prudent on your part to opt for a 25-year loan term as you can never rule out financial emergencies in your life. The 25-year old loans are just a bit more flexible.
Find out reputable lenders
There is no dearth of lenders offering mortgages in the market. However, you need to ensure that you are only settling for reputable mortgage lenders. NPBS mortgages, for instance, offers you a range of affordable home loan packages to suit your needs. Depending on your preference, you can either opt for loans either with fixed or variable rates. You even have the freedom to split your loans or opt for credit facility.
Make sure you are steering clear of lenders with predatory lending practices. Please ensure that you are actually investing proper time in surveying the background of the lenders and only settling for reputed lenders.
What should your monthly budget contain?
Last but not the least—there is no substitute for proper monthly budgets as a means to step up your savings. As already mentioned above, a mortgage remains one of your major financial responsibilities and you have to factor your entire budget on attributes like lifestyle expenses, monthly repayments on the mortgage loan and the one-off yearly repayments such as car insurance, registration and others.