Saturday, November 2, 2013
Five Tips to Slash Your Home Finance Costs
It's no wonder that the majority of homeowners dream of one day being able to pay off their home loan and live a life free from the shackles of interest rates, home finance and worries about meeting the monthly mortgage payments because the largest expense the majority of us take on in a lifetime is our mortgage and each month our home finance payments take a substantial chunk out of our take home pay.Just think what you could do with all the extra money you would have spare if you didn't have to meet your mortgage each month! Interested? Well, here are five steps that you could take today to substantially slash your mortgage repayments and the overall cost of your home loan and even speed up your rate of repayment so that the day when you've paid off your home finance and are free to live the life you want comes that much sooner.Step One - Demand Better Service!As a loyal customer of your mortgage lender isn't it about time you were rewarded for your financial commitment, for making your regular payments and for being a good, long term customer?Well, you can rest assured your mortgage lender will not reward you unless you ask for a better deal on your mortgage!So get on the phone, call up your lender, ask to speak to someone in customer services or the customer retention department and explain that you're looking around for a better mortgage deal. Ask them for an evaluation of how much you have left to pay so that you can give it to any one of the hundreds of other mortgage lenders out there all willing to give you a better deal.If you are indeed a valued customer you should receive favourable feedback to your demands and receive details of better offers currently available to you from your current lender.Remember, if you don't ask you don't get and be adamant about what you want!Step Two - Shop Around.If step one doesn't get you the deal you deserve, shop around. There really are well in excess of a hundred lenders out there all seeking new customers who will offer you incentives to take up their mortgage product.Use the internet to get an idea of rates being offered and special deals available to you. Do remember that lenders will do everything they can to make their deal seem like the most attractive one available and do everything within their power to attract new customers so you need to be shrewd.Look for any hidden charges or tie in clauses and make sure you evaluate products offered on a like for like basis taking into account all the features of the mortgage offers available.Step Three - Call in the Cavalry.Well, not the cavalry exactly but expert assistance in the form of a licensed and regulated fee free independent mortgage broker. In the UK these guys are now regulated by the Financial Services Authority and in the US they should come under the scope of The Responsible Lending Act.As independent brokers they have access to and understanding of every single mortgage product available and they should be best placed to assist you find a better deal than the one you have now where your repayments will be less, your interest rate will be lower and the amount you repay over the entire duration of your loan is reduced.Make sure your broker is fee free and remunerated by any company you decide to take a mortgage out with. More importantly than this, make sure they are regulated and licensed correctly and if possible ask for professional references or testimonials.Step Four - Cut Out All ExtrasMortgage lenders are notorious for selling overpriced add-ons such as life insurance, home insurance, contents insurance, income protection cover...all these insurances have their value of course - but you can bet your bottom dollar that you can every last one of them for a fraction of the price by going directly to an independent insurance house or even seeking the services of an independent financial adviser to find you the best deal available.You could literally save yourself thousands each year in insurance premiums!Step Five - Throw Some Money at ItSo, you've cut your interest rate down to size, reduced your monthly repayments, maybe received a cash lump sum from a new lender and saved yourself thousands on insurance products - now turn all those savings back into your mortgage and repay early.Make sure you have it negotiated into your new mortgage contract that you can make early repayment or lump sum annual top ups and get rid of the millstone round your neck, free yourself from your largest financial commitment as soon as possible and save thousands in interest payments and enjoy freedom of life once again!