Buying a home is increasingly expensive, but there a few ways to reduce costs, through smart financing, taking advantage of deals and using your home to bring in extra income. There are many costs involved in saving for a home, but the mortgage will be your main one. Read on to find out how you can lower your monthly mortgage repayments.
1. Finding a Cheap Mortgage
A mortgage is just like any other loan, so its cost depends on multiple factors. Firstly, check your credit rating. Go through your credit statement checking for mistaken late payments which may be bringing your score down. If your rating is still too low, take steps to improve your credit score. This will increase chances of securing a mortgage with a low interest rate.
Next, look online for the best deal. Don’t just accept the first offer on the table. Use online mortgage comparison tools to find the best deal. You can always reduce the cost of your mortgage by overpaying when possible.
2. Reverse Mortgage
This only applies to those over 62, but if you are an older homeowner, then you may be able to receive a significant discount on your payments if you can acquire a reverse mortgage. In fact, a reverse mortgage will pay you! This is because it uses the equity gained on your house to supplement your retirement income.
This means that if you are middle aged, your home may not be as expensive as you think. You can buy now and let the equity accrue. This money will then be returned to you as you enter retirement, meaning that the overall mortgage cost is lowered.
One way to reduce the cost of monthly mortgage payments is to rent out a room. This way, someone else can be providing you the income for your payments. If you have a spare room, consider using a subletting service such as Airbnb. You can even rent out the whole property if you are away for part of the year.
With these tips, your mortgage may be cheaper than you think. Ensure you have a strong credit rating and look around for the best deal. Take advantage of any offers such as the reverse mortgage for over 62s. Finally, sublet your space to provide extra income which can be used to pay off the mortgage.