If you want to own your home, for most people, that means taking out a portage. This is likely to be the biggest debt you have in your whole life, and you can be paying it off for as many as 30 years.
Of course, a mortgage is not like most other debts in that you will own your own home once the payments are complete, and that means you will (hopefully) have a significant asset at your disposal. But that doesn’t mean that the monthly cost of a mortgage is always easy to manage.
Not only that, but if you could save money on your mortgage, then it would obviously be sensible to do so because then you would have more cash in your bank account that you could use to build up savings for the future or have a better quality of life right now.
With that being the case, let’s look at a few things you can do to save money on your mortgage right now:
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Find the best deal in the first place
This will not apply to anyone who already has a mortgage, but if you are just getting ready to buy your first house, then the best thing you can do for your finances is to shop around and ensure that you get the best possible terms for your mortgage that you can.
Whether you are applying for a standard mortgage or a bad credit mortgage, there will be a number of lenders to choose from, in most cases at least, and that means you need to look very carefully at the terms of each to ensure you choose the mortgage product that is most suitable for you, and which charges the smallest APR possible. If you start out right, then it will be much easier to manage your mortgage over the long term too.
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Downsize
If you do already have a mortgage, but you are looking to make savings, then one of the most significant ways to do so is to simply downsize to a smaller home in a more affordable area.
Obviously, this is not a solution that will be appropriate in every case or appeal to everyone, but for older people who may not need as much space as they used to because the kids have flown the nest, for example, this can be one of the most effective ways to save money on your mortgage.
Some people will even be able to buy mortgage free should they sell up and move to s smaller palace. Depending on how much equity they hold, so it is a solution that should not be discounted out of hand if you are looking to cut your monthly costs and live more comfortably.
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Consider a fixed-rate mortgage
With the way things are going right now, mortgages are probably only going to get more expensive, so if you are on a standard variable rate that is linked to inflation, it may well be worth your while to fix your mortgage contract for a set period of time.
Of course, when it comes to inflation, there are no guarantees, so you should talk it over with a financial advisor before you make any financial decisions, but fixed rates can often save you several hundred pounds each year, which would be better used for savings and home improvements, so it is definitely worth looking into the possibility of a fixed rate mortgage product.
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Buy separate home insurance
Many people have their home insurance bundled together with their mortgage, and often this is a much more expensive option than simply having a separate home insurance product.
Of course, it is really important that you do have home insurance because should your home be damaged or you be broken into, you would otherwise have to pay for any repairs and replacements out of your own pockets, but by decoupling your home insurance from your mortgage, there are big savings to be had.
Use a home insurance price comparison site to see what other op[tikons are available to you and how they compare to your current insurance, and if the difference is less, make a change.
You may also be able to save money by checking that the level of home insurance you have bundled with your mortgage is appropriate to your needs. If the coverage level is too high, you may be able to negotiate a lower price for a lower level of coverage, but make sure you are covered to a high enough level that you will not have to pay out of pocket should anything go wrong because that is a huge false economy!
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Look at daily interest mortgages
Many people are wary of daily interest mortgages because it would seem like paying interest that is charged daily rather than annually would cost you more in the long term, but that is a misunderstanding of how interest works, and actually, when you are charged daily, you are pretty much always going to end up paying less altogether because the interest you pay daily will be automatically applied to your mortgage account, which means less interest will accrue. Over time, this can make a huge difference to the amount of interest you pay over the years.
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Overpay
It is not always possible to find extra money to pay more than you are obligated to off your mortgage, but if you are able to do so, it will save you money on the cost of owning your home over the years.
You see, when you overpay, your mortgage will be finished much faster, which means you will pay much less interest than you otherwise might have, although there are some exceptions where you will need to pay an additional lump sum if you pay your mortgage off early, and because overpayments will be applied to your account each month before interest is calculated, your monthly interest costs are likely to be smaller too, which means your payments will also be smaller as well.
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Extend your terms
If you are struggling right now, and you are looking for ways to cut your costs each month, then extending your mortgage terms so that you pay it off over a larger number of years is an option.
This will mean that your monthly payments reduce, but of course, you will end up paying more in interest over the years, so it is probably only something you should consider doing if you are really strapped for cash and simply can’t afford to easily keep up with the mortgage payments right now. If you have any other options, then extending your term probably isn’t in your best long-term interests.
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Check out discount deals
Many people do not realize that you can get discount deals on mortgages, but many mortgage providers will offer incentives to bring customers on board. For example, some building societies will offer lower prices to people who live nearby and some companies will offer discounts on mortgage payments for the first few months, increasing afterwards, which can be helpful if you are in a tough financial spot right now. Just make sure that you always check the fine print so that you know what you are getting into, and you are sure that you are getting a good deal and saving money because it is not always as obvious as it should be.
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Remortgage
Remortgaging is probably the most common way that people find cheaper deals on their mortgages. If you are being charged an excessive amount of interest, chances are there is another company who will be willing to give you a mortgage on better terms, so taking the time to compare prices and find a lender who is likely to take you on could be a smart move.
Of course, if you are going to remortgage, you will need to ensure that it is the right thing to do, which is why it is never a bad idea to talk to an independent financial adviser who will be able to take a look at your finances and see what you are doing well and what could be improved on. Often, you might not need to remortgage at all if you make changes to various other aspects of your financial life instead.
As you can see, it really is possible to lower your mortgage burden in a number of ways, depending on your current needs; you just have to be sensible, not end up settling for the status quo, and always ready to make a change when it would be prudent to do so even if it is more of a hassle to do so in the moment. This might seem like a whole lot of effort to go to, but if it means you can lower your mortgage payments and live a more comfortable lifestyle with a larger financial cushion, then I think you will agree, that it will be totally worth it.
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