Reduce Your Housing Costs
Covering housing costs are often one the biggest monthly expenditures. There are several ways in which these costs can be reduced or mitigated against.
If you own your own home or are considering purchasing a new home, the following possibilites can save many thousands over time.
- Do not overstretch yourself when buying a new home. Always purchase well within your means if you can. You will then have more flexibility and finacial freedom.
- Negotiate hard to purchase at the lowest price possible and make sure you are completely familiar with local house prices.
- Your mortgage is likely to be your largest expense. Be sure to try to get the very best deal possible. Take proper advice. Do not judge a mortgage by it's APPARENT affordability.
Avoid NEGATIVE AMORTIZATION loans, these often feature very low monthly repayments that do no reflect the true rate being charged. What people often don't realize is that whilst the repayment may be low, the amount you owe increases each month and your debt can quickly spiral out of control. Unscrupulous lenders often lock people into these deals with early redemtion charges.
- If you already have a mortgage it may be worth considering refinacing if you can get a better deal, remember to factor in all the additional costs.
- If you have other high cost debt such as credit card debt that you want to clear. It is worth considering asking your lender if you can pay 'interest only' for awhile and use the repayment element to help paydown your other debts. It makes little sense to pay off your cheapest debt, when you are being crippled by expensive debt elsewhere!
- If you are paying PMI, you can save many thousands by refinacing using what is known as a 'piggy-back' loan.
- If you are finding difficulty meeting your mortgage payments, consider taking in a lodger to help towards the cost.
Renting a Home
If you are renting, you have great flexibility and the ability to move to lower cost areas if the rent gets too high. By keeping your rent low, you free up more cash for your financial advancement.
- Rather than rent on your own, share with friends. Not only can you reduce your rent AND your household bills - It can be a lot more fun!
- Do not rent anything more than you need, you could be putting that extra money towards your financial freedom!
- Make sure you do a thourgh search, not only through rental agencies, classified ads and friends, but also check out building where you want to live and find out from the manager if anything is available. You can often get a much better deal this way.
- Always visit more than once, check out the neighbours, go on a weekend. Once you sign a lease you may be obligated for the duration, so you want to be sure you have made a good choice.