Handy Tips to Help Keep Your Mortgage on Track
It’s important to keep your mortgage on track, resulting in a stable home and a sound mind. Here are some tips to keep your mortgage healthy and stable, including what to do if your finances take a slight tumble.
Create a budget
The first thing you should do even before you take on a mortgage is to create a budget and adjust when necessary. Ensuring you have more than enough for your mortgage repayments each month will give you peace of mind that what’s likely most significant bill, is taken care of. A reasonable starting budget will make it easier for you to set aside extra funds for a new kitchen or bathroom or extra mortgage repayments.
Our budget calculator will help you determine and keep a check on your spending. This also helps if your income lowers, or your outgoings increase. You can immediately see that cutting out a non-essential spend will save X amount of money, allowing you to adjust your spending accordingly quickly, and stay on top of your mortgage and other bills.
Plan for future financial changes
When planning your budget, it can also benefit you to prepare for any potential changes to your repayments, including factoring in any increase in interest rates, or a lowered income. These can both come as a surprise, so it’s best to plan for these in advance – allowing for extra savings in your budget in case you need the money when the time comes.
Sometimes the worst happens, and you’re struggling to pay your mortgage without any extra help in place. It’s important to get help as soon as possible – there may be alternative solutions to help you if this happens.
Make extra mortgage repayments
Where possible, if you have the cash to spare, or come into some money, you should seriously consider making extra repayments into your mortgage. Not only will this help to pay off your loan quicker (with less interest to pay), you may be eligible to redraw money if and when you need it, giving a boost to your future financial security.
Discuss payment options with your lending manager
Coming to terms with financial struggles is tough and going to your lending manager can be considerably daunting. However, it’s likely the best way to get through the rough patch and emerge unscathed on the other side.
Every lending manager has dealt with others in financial difficulty. You won’t be the first nor the last, and there are many avenues your lender can suggest to solve the problem, including:
- Extend your loan period – this option changes the terms of your loan to make it easier to pay your mortgage. Each payment amount can be reduced, making the number of total repayments increase over time. This should only be a temporary fix, so after an agreed timeline your payments should revert back to their original amount. Remember, extending your loan period will increase the amount of interest you pay, so this solution should be as short-term as you can afford.
- Postponed payments – you may be able to agree upon a period of time where your repayments are stopped, giving you plenty of breathing space and enough time to get yourself back on track. Like extending your loan, this will also result in an increased timeline of payments and further interest.
- Repayment Holiday is an option for those with planned out financial changes, like maternity leave or a career break.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re thinking of selling your home and are ready to make the next move buying or investing, you can contact us for information about the best options for you when it comes to your mortgage.