When you choose to take out a mortgage, it pays to have a few budgeting tips up your sleeve. It's important not only that you know what your repayments are, but that you can afford them too!
Whether you're working out the payments for a mortgage refinance or are a homeowner looking to move into a better property, here are a few helpful tips to make the process as simple as possible.
Already a homeowner? You'll know what your weekly, fortnightly or monthly payments are currently - but how much could they change if you refinance your mortgage for a new home?
If your repayments are going to increase so you can secure your dream home, start setting this extra money aside now. Even if it's only an extra $30 per week, it pays to get into the habit.
However, if you're downsizing, you might discover that your repayments will be less. That's no reason to stop saving though. Once you switch to your new mortgage, work out what the difference is per payment compared to what you were previously paying.
Put the difference aside, perhaps into a dedicated holiday account. You'll not only be continuing your savings skills, but you'll also have a nice reward to look forward to!
It's easy to spend more than you realise if you use the plastic frequently or withdraw cash and spend it as you please.
A great way to illuminate what you're really spending your money on is remarkably simple. Note down all your spending over a weekly - or even monthly - period.
It's often the small things that add up, so while a takeaway coffee here or there might not seem like much, you might find it's eating into your expenses more than you realise.
Once you've recorded your actual outgoing expenses, you can set yourself limits on spending for items that aren't necessities.
Working out the figures for a mortgage refinance is one thing, but actually sticking to the figures is another!
Put together a spreadsheet with your incoming and outgoing expenses, and fill in the projected amount as well as the actual amount.
Ideally, the amount you project for fixed costs should never be less than the actual amount spent. Certain costs - such as your mortgage repayments - are fixed, and won't change from month-to-month.
However, costs such as electricity bills may vary, particularly in the cooler seasons. It's still wise to overestimate what the costs will be. If you have money to spare, you can put it toward the following month, or put the remainder in a savings account.
Taking out a mortgage refinance? Make sure you budget for it properly, whether your repayments will be increasing or decreasing.
Online lenders are often able to offer cheaper home loan rates as they don't bear the cost of expensive overheads (such as traditional branches).
Finding a good home loan deal is also about getting a rate that works for you. Fixed rates are a dream if you're on a strict budget, as you'll know exactly what your spending is going to be. However, variable rates are a viable option if you want to benefit from a drop in interest rates.
Once you've sorted out the best home loan, look out for great deals elsewhere, too - from discounted meal vouchers to bulk buying opportunities and discounts for prompt payment of bills.
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