September 21, 2017

Uncommon tips on how to save money on home loans

The traditional route of refinancing is not the only way to save money on a home loan. There are several unique money saving strategies that you can implement. Here are some uncommon tips on how to save money on your home.

Round up your monthly payments:

Any extra money that you pay towards your principal is considered as value. Therefore, with every payment, round it up to the nearest hundred. If you have a payment of $1,908, round it up to $2000. The extra $92 payment each month will shave years off your interest payments.

Make 13 payments a year:

There are several benefits associated with making an extra payment each year. It will reduce the amount of interest paid over the life of the loan, it will reduce the time frame on your loan, and it will increase the amount of equity available in your home.

Make fortnightly repayments:

Did you know that there are 26 fortnights in a year? If you make loan repayments fortnightly, this is the equivalent of making 13 month repayments per year. This will increase equity available and you will save years on your loan, paying it off sooner.

Periodically review the terms of your mortgage:

Make it a habit to shop around every three years to discuss whether or not your loan is still appropriate. Depending on the economic climate at the time, you may be able to get a lower interest rate.

Check your statements:

Sometimes we can get so comfortable with banks that we don’t check our statements. Everyone makes mistakes, even banks. Check your statement thoroughly to ensure that the bank has not added any extra fees, or charged you incorrectly for a service that you didn’t purchase.

Downsize:

An annoying and a tedious move, but if you want to save money moving to a smaller place where you pay less on your mortgage could save you thousands. By downsizing, you mIgor be able to reduce or eliminate mortgage insurance, and reduce monthly payments as well as a host of reductions on other expenses including utility bills.

Home insurance:

Shop around for a better home insurance deal. You can reduce your payments by finding cheaper insurance rates elsewhere.

Final thought:

Buying a house is probably the biggest investment you are going to make. This should be a pleasurable experience. After all, you are securing your future in this investment; however, at times, owning a home can be very stressful especially if every penny you earn is going towards a mortgage.

Implement some of these uncommon money saving tips on your home owner loan and you will soon notice a difference to your bank account.

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