If you had a $100 windfall, what would you do with it?
Save Money On Your Mortgage Before It Starts
1) Avoid borrowing if possible
Obviously the best way to save money on a mortgage is not have one in the first place. Every penny that you borrow must be repaid WITH INTEREST.Mortgage interest costs a vast amount of money. Over the average mortgage term of 25 years, most borrowers will pay the same amount of money in interest as the actual loan itself.
Yes, that house you bought for $200000 could cost you a total of $400000 if you use a mortgage to buy it. This is despite the low interest rates at present. In fact, when interest rates are higher it may cost two and a half or even three times the original amount borrowed! So, avoid the need for a mortgage and save yourself at least $000s.
But I realise that such basic and largely impractical advice is hardly going to help you. As I said earlier, most people just don’t have enough money to buy a house outright. Let’s face it, if house prices rise any more the average house buyer will need a mortgage just to pay the deposit! So lets move on to more constructive mortgage saving advice.
2) Accumulate a bigger deposit
This may sound a mighty task given the price of property, but when was anything worth having easy to acquire? Worry not, because help is at hand. Saving to put a substantial deposit to your new property will be much easier if you use our money saving advice.The larger your deposit, the less you have to borrow, and the less interest you’ll have to pay. Every extra dollar that you can scrape together will save you around two dollars on your overall mortgage costs.
A larger deposit will also help you to avoid any high percentage lending fees.
Next: Avoid High Percentage Lending Fees
Previous: Eliminate Mortgage Debt - Introduction
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