19 November 2013
19 November 2013,

1.       Set a budget

Work out your expenses (fortnightly or monthly) and factor in your mortgage repayments.

You might need to cut back on spending in certain areas to make sure your mortgage is a priority. Keep a diary (or get one of those smart phone apps) of your spending and stick to your budget.

2.       Cut your debt

Reduce the number of credit cards you have (ideally down to one) as well as their credit limits, and only use them sparingly or make sure that you clear them every month – don’t spend more than you have….

Having a mortgage means taking control of your spending.

3.       Pay more than the minimum

Split your monthly mortgage repayment in two and make your repayments fortnightly, helping to save on interest charges.

Through this strategy you will essentially make 13 monthly repayments over the course of a year, rather than 12 – which will drive your principal down and potentially save thousands in interest repayments over the life of your loan.

When extra funds come your way, like tax refunds, put them straight into your home loan as well – it can really make a difference in the long term.

4.       Direct debit

Arrange for your mortgage repayments to be direct debited from your Bank Account – the same one your pay goes into, so you always make them on time. Don’t make it complicated with funds going into different accounts.

The simpler the system the better as it will always work on time.

5.       Don’t be late, don’t put your head in the sand

If you’re struggling to meet your repayments, speak to your lender or me soon. Do not wait until you get in real trouble as the way out is so much harder.

Refinancing may be one option available and to consider consolidating other debts if you have some. Or the lender (aka bank) may be able to offer payment options in the short term that can help.



David Johnson – The Home Loan Guy

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