How to Save Money on Your Mortgage Payment – There are lots of things you can do to reduce the amount you spend, and the following suggestions are some of the best ways to save money because they can have the biggest impact on your spending. The more you save on what you spend the more you have available to pay off your debts.
Have you ever thought of saving money on your mortgage payment? There are several ways to save money on your mortgage payment. If you wish to save money on your mortgage payment then read on.
How to Save Money on Your Mortgage Payment
Here are some simple tips which could help you save a considerable amount of money on your mortgage payment:
1. Examine Your Mortgage Deal
This is likely to be your single biggest cost, and therefore has the potential for the biggest saving. The large amounts involved mean that even a small difference in interest rates can have a significant impact on what you pay.
The fact that you are going to be paying it for so long is another reason to examine it closely and regularly. A relatively modest change per month could save you thousands over the term of your mortgage payment.
2. Ask Existing Lender for a Better Deal
That would be less hassle than changing to a new lender, so it is well worth a try. Some lenders are less desperate to keep your business than they used to be before the credit crunch. But many would still be happy to improve your deal rather than lose your business.
If you do consider changing to a new lender, you will need to know if there are any penalty charges for leaving your current mortgage early. As this will need to be allowed for when you are calculating what you might save. Ask your lender to confirm the total costs involved in closing the mortgage.
You must also consider legal costs and any fees for setting up the new mortgage.
3. Pay off Debts First Instead of Saving
I think this is one of the best ways on how to lower your mortgage payment. This feels counter-intuitive when we are always told we need to save more money. But it does not make financial sense to put money in the bank if you have debts that are costing you money in interest.
Pay off your debts if you want to save money on your mortgage payment.
4.The Rationale Behind this is Very Simple
The interest you pay for borrowing money is ALWAYS more than the interest you will get from having money in the bank (with the odd exception such as special short-term offers on some credit cards). This has to be the case it is the basic operating system for banking.
They give you a bit of interest for the money you deposit with them. So that they can lend it out to someone else and charge more money the difference between the two rates is their profit.
When you are planning to pay off your debts, always tackle the most expensive ones first. Look at the interest you are paying and use this to work out a priority order for paying them off.
5. Review Your Energy Suppliers
If you want to save money on your mortgage payment, you really do have to keep a close eye on your gas and electricity supplier these days.
This is a constantly shifting field and you need to compare the rates about every six months or so. Try to leave it until just after there has been a big price change. Once one supplier changes their prices, the others usually follow in a few weeks. Then it should be fairly stable for a while and that is the time to change.
The easiest way to compare prices is on one of the comparison websites. They make it very easy to swap now.And you can often get incentives for changing through them, such as cash back or vouchers.
It is usually cheaper to pay by direct debit. But you should always check your actual meter reading every month rather than rely on the company’s estimates. They seem to go for ages without bothering to read meters at the moment.
Their estimates can be wildly out, so to avoid being lumbered with the unexpected bill a year down the line, check what you are actually using. Give them your meters reading, and pay the correct amount.
6. Credit Cards
Ideally, you need to try to pay your cards off in full each month. If you can’t do that, you are storing up problems for the future.
Assuming you do have some debts on credit cards and can’t afford to pay it all off in one go. You should at least set up a direct debit to make a fixed payment each month, based on the very most that you can afford. The credit card companies want you to just make the minimum payments. Because then you pay them interest for a very long time, which is how they make their money.
7. Setting Up a Direct Debit
The extra cost to you in just making the minimum payments is huge.The less you pay each month, the longer you take to pay them off and the more interest you pay.
The other advantage of setting up a direct debit to pay your cards is that you make sure you don’t miss any payments by accident and incur any needless penalty charges. This will help you to save money on your mortgage payment.
8. Shopping for Food
The fact that you go shopping so regularly means that it is a very substantial cost when you look at it over the course of a year. We all have our favorite brands and reasons for choosing one make over another. But with the advent of supermarket own brands and now economy brands. There is a huge price difference available on what are often very similar (if not identical) products.
Research shows that if you can drop one brand level on all your shopping, you will save one-third on your shopping bill!
That is a stunning statistic, which will have a massive impact on your pocket. You don’t have to change to the economy version of everything, if you normally get own brand, try economy.
9. Take a Look at Your Calendar
You’ll realize if you pay the $250.00 per week instead of $1000.00 per month you will end up making an extra 4 payments of $250.00 by paying weekly. 1000 x 12= $12,000 vs. 250 x 52 weeks = $13,000.
By making those few extra payments per year you will save $40,000.00 on your mortgage payment! There are big savings available when dissecting your mortgage payment. You can also use a free mortgage calculator to calculate the amount you want to save.
10. Pick The Right Loan Terms
Picking the right loan term for your needs will also save money on your mortgage payment. For example, if you plan to carry your second mortgage for more than two years, then choose a fixed-rate loan. You can protect yourself from higher interest costs by locking in today’s low rates.
The difference between products will vary from quite noticeable to non-existent. Just make sure you are judging objectively, and not making your mind up before you taste it because of your expectation. Blind tasting is preferable if you want to do it properly.
Depending on your current situation, following the above advice could potentially save you a very sizeable amount of money on your mortgage payment over the course of a year. For people who are getting into some debt, this sort of expenditure management is well worth the effort as it can be enough to put a hold on the level of debt and help you climb back out. Debt has a habit of increasing and spiraling to crisis level if not tackled early.
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