Saving money on your mortgage can be hassle-free and easy with the right advice and follow-through.
According to Jane Slack-Smith, director of Investors Choice Mortgages and founder of Your Property Success,'The first step towards trimming your mortgage debt burden is to tweak your mindset.'
A lot of consumers merely look at interest rates when shopping for a home loan. Slack-Smith advises that it's just as important to look at the loan features. Take for instance the case of potential borrowers who would baulk at the suggestion of paying a professional annual package fee of $400 when in fact, said package fee could save them more money if they learn the many options available.
Slack-Smith further explains that paying a professional annual package fee and saving $10 per month on a savings account, an additional $90 on credit card annual fees and getting discounts on insurance is actually worth the investment.
'In fact, you often get great interest rate discounts as well, so the interest rate could be the same or lower than many advertised basic rates,' she says.
Below are Slack-Smith's most effective money saving tips on home loans:
- Make the most out of what you have
If you have an offset account then make sure you're maximising the benefits. Having an offset account is also an effective strategy in saving money. 'For homeowners, putting your additional savings in a savings offset account can save you years off your loan and still give you immediate access to your savings,' Slack-Smith says.
'As an investor with interest-only loans, the immediate monthly cash flow benefits can also make life easier, not to mention keeping their deductible debt intact,' she says.
- Remember to talk turkey
Although it is a fact that banks are adept in attracting new business, they are also known to be just as keen in retaining existing clients. So as a consumer, you may not go through the trouble of moving from lender to lender in search of a better deal. 'Ring your current lender and tell them you have seen better deals elsewhere. Quote them and ask what they can do. You might get a better rate on the spot,' says Slack-Smith.
- Regularly check your statements
We all make mistakes and banks are no exception, so regularly checking your statements can lead to more savings. According to Slack-Smith, 'Sometimes, extra fees or charges can be allocated incorrectly to your account.' Make it a habit to check your monthly statements and make sure that there is nothing wrong or unusual before filing it.
- The 'health' of your home loan is just as important
Your home loan, just like you, needs a periodic health check to make sure that all aspects are in perfect condition. There are a lot of instances where your circumstances change but your investment or home loan is not reviewed. Slack-Smith says you should carry out a home loan health check regularly: 'Make it a practice every three years to speak to your broker and check in and see if your loan is still appropriate. This might even mean checking in sooner and seeing
By following these 4 simple tips, you could end up having a considerable amount in your savings account. Do you have any other tips to share? If so, leave a comment below!