Is your home loan becoming a burden? Do you suffer from high interest rates? If your answer is yes, you need to give your home loan a health check. You are not the only one who is experiencing and battling with the same issue. This is a common problem often encountered by those who invested in a home loan. As the family becomes bigger, the expenses also grow. What are you going to do when monthly bills start to come in and you feel that you are in a state of financial stress? Of course, you cannot skip paying these monthly dues especially your home loan repayments. Tightening your belt or stretching your budget will be the initial move but when it’s no longer working, you might need to take a closer look at your bills, especially your monthly repayments.
Review Your Home Loan
Believe it or not you can do something about your home loan. Give it a general health check. You might be surprised that your repayments can drop to at least 3-4% which will allow you to save more money. Here’s how in four effective steps:
- Assess – Check your current home loan. This involves terms, interest rates, current rate, or does it have flexible features?
- Refinance – People refinance to improve their home loan. Basically the features are mostly favorable on the side of home owners. Before you jump into this idea, you need to consider the fees, like discharge fees from the current lender and upfront fees charged by the new lender like the application and valuation.
- Interest Rate – Before you jump into refinancing, select a home loan that matches your needs. There are several types of home loans to choose from – a variable, fixed or split rate loan. Variable is the most common option because it has flexible features. No loan is suitable for everyone. People have different needs. It is best to ask what type of loan suits you best.
- Compare – Don’t be afraid to compare rates. Often times, there are home loan calculators available online. It is easier to make calculations so you have an idea of how much you are going to pay for. Hop from one site to another. It requires a little of your time and patience for you to find a suitable home loan.
Keep in mind that your goal is to save and switch to a cheaper loan or to pay off your loan in a shorter span of time.