Monday, April 03, 2006


I guess one of the biggest investments you are going to make in your lifetime is buying a home for yourself and your family. It is pretty unusual to be able to purchase a home without a mortgage these days so this is going to be one of those loans or debts that are going to be around for a while. Mortgages are one of the cheapest ways to borrow money over the longest term and when you have a mortgage, paying for it will be with you for a long time.
There is however no reason why you should keep to the 25 or 30 years of a mortgage you have been given as a term. You could make overpayments as a form of savings thereby cutting back the amount of years you have to pay and the total cost of your mortgage.
To do this however you need to have a very disciplined approach to your savings. You could make a monthly overpayment or save it separately and pay a lump sum off each year thereby reducing the amount you owe and thus also your monthly payment ( but do check that there are no penalties in your mortgage deal).

How can you reduce your mortgage payments?
Well surprisingly, people who take out a mortgage think they have to stay with the same lender, but a mortgage is just like any other consumer product and it pays to speak to your financial adviser to see if you can get a better rate and spend less out of your monthly budget. You will be surprised how much you could save. A friend on mine did this exercise and saved
£ 1200 in one year which is not to be neglected. As with everything you can shop around and see if you can find the item at a better value.
If you have saved anything as a result of this plost, let me know.

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