Ways to Reduce Your Monthly Mortgage Payments

If you have found your way to reading this article because you are struggling to pay your mortgage, then our first piece of advice to you is to talk to your lender. Burying your head in the sand is never the answer and you could ultimately end up losing your home. Don’t panic though, there are lots of things you can do.

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Your financial situation can change in a moment leaving you with a reduced income or different challenges to your budget. The best way to deal with such things is dependent on the expected timescale of the problem. For instance, if you’ve lost your job and the employment market is buoyant you may only need to move money around for a few months or maybe ask your mortgage provider for a payment holiday. If you have to take time off work to care for a sick relative, you may be facing months of reduced income. We don’t have a crystal ball, but we recommend you proceed on worse case scenario basis because your lender will be much happier if you cut short a three-month payment holiday rather than being unable to make payments for a further six months. You may just want to reduce your payments to free up money for other things rather than finding yourself in trouble, which opens up your options. Whatever your reasons, please don’t hesitate to get in touch with us here at Gemstone Mortgages so we can talk about all your choices and work out which is best for you.

Keep shopping around

Never stay on a standard variable rate (SVR) mortgage! When your introductory rate is approaching expiry start shopping around for the best deals on the market. You can, of course change to a better rate before it expires but you need to be sure the early repayment charge doesn’t negate any potential savings.

Whilst you can source mortgage rates yourself online, by choosing a reputable mortgage adviser you will not only have access to a wider market you will also be privy to expert advice to ensure you make your decision based on all factors and are not blinkered by what may at first glance appear to be an unmissable deal.

Take an interest in your interest rate

When you are paying interest on a substantial loan such as a mortgage, just a small change in how interest is calculated can make significant savings or cost you a lot of money! If interest isn’t calculated daily, then you could be paying interest in money you have already paid back.

Need a quick fix?

If you find yourself in a challenging financial situation you may be able to extend the mortgage term. You will end up paying more back due to interest but by reducing your monthly payments may make all the difference to you being able to keep your home. Alternatively, you could consider switching to an interest only deal, significantly reducing the amount you pay each month, although you will need to make separate arrangements to be able to repay it at the end of the term. That said it could be the right interim solution for you whilst you get back on your feet.

Mortgage Protection Insurance

It’s always worth checking that the mortgage protection you have is appropriate for your needs and that you’re not already covered through your employer. Like any insurance, make sure you are paying the right amount for the cover you are getting and don’t hesitate to switch providers for a better deal. Think long and hard before you cancel completely though, if you became ill for a long time you could lose your home when you are at your most vulnerable.

Whatever your situation is and however bleak things seem, by talking with someone who understands all the solutions and can help you find the right match, you could save money and keep your home. Call us today and make that first step.