Sandy Bhalla reveals some simple tips and tricks to help you swindle some extra cash for rising mortgage repayments – without sacrificing onshopping.
April 4, 2010
Saving to buy your own home can be tough, but what’s even tougher is meeting those mortgage repayments. Thanks to federal and state government initiatives, over the last year many Aussies have successfully jumped on the property bandwagon. But with the rise in interest rates, the dream of owning your own home, for some, has become little more than a struggle to make ends meet.
Fortunately, there are many tips and tricks to help you reduce your mortgage stress and still have some money for a few luxuries.
Prepare a budget
Before you start saving, it’s important to draw up a budget so you can determine how much it will cost in mortgage repayments and how much you will have left for expenses.
Switch products to manage your money better
For example, switching to prepaid mobile from a plan will allow you stick to an allocated monthly amount and switching to a low-interest variable mortgage can save you hundreds in repayments.
Change the way you shop
When shopping around, make sure you negotiate on big purchases or essential items. You can get good deals if you ask and sometimes discounts if you pay with cash! You can find bargains for most things online, including home furnishings. Sites like eBay, Trading Post, or even Craigslist allow you to place bids on specific items as you would in auction.
Have your garage sale online
Selling things on sites like eBay is a great way to generate more money and spring clean at the same time. It only takes a few minutes to set up an account and the money you make can go towards replacing your old lounge suite or upgrading your mattress.
Reduce the size of your loan
By making extra repayments on your loan or setting up an offset account, you can reduce the size of your mortgage considerably and save on interest. For example, a $300,000 variable mortgage with a 7 percent interest rate would cost about $2120 per month. By adding an extra $200 per month to your repayments you could save $76,700 on interest and cut the 25-year loan term by about five years!
Turn a hobby into a small business
If time permits, turning a hobby into something more professional is a great way to generate extra income. Make sure you read up on the tax implications before you start selling your grandma’s chutney recipes to supermarkets.
It’s no secret that paying more dollars into your mortgage will cut your interest bill and take years off your loan. By sticking to your budget, working your money smarter and following just some of the tips above, you will find yourself wiping your happy and successful feet on the welcome mat of your very own home, complete with a stunning decor to match!