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Managing your mortgage
‘Your home may be repossessed if you do not
keep up repayments on your mortgage’
It's not the nicest phrase in the world but the
fact is, it’s true. Everyone is so keen to get onto the
property ladder, that nearly everyone forgets that their home
isn’t really their home. It belongs to the mortgage company
(that is until you’ve made your last repayment).
The best and most efficient way to ensure that you
will be able to make all of those repayments in full and on time
is to budget. Measure your income against your expenses and take
care to budget correctly for your mortgage. If you start to wonder
where all your money is going, and you can’t meet your mortgage
payments then budgeting is the simplest way to establish exactly
where your outgoings lie.
You’ll begin to realise that money can be
saved by merely cutting back on a few luxury items such as, socialising,
eating out, retail therapy etc. However if you think you may end
up missing a payment on your mortgage then notify your lender
as quickly as possible. Show that you are seriously thinking about
your finances and that you have begun to budget and you may be
able to come to arrangement by which you pay the interest on the
repayment until you get your feet back on the ground.
Prevention is better than cure, so even before you
apply, considerations should be made about a mortgage that can
be easily budgeted, such as a fixed rate mortgage. This allows
you to calculate every amount for the first few years.
How to budget basics:
Step 1: Calculate your total income per month, include
your salary, your partners salary, and any other income you may
have, i.e. Rent from another property.
Step 2: Calculate your monthly expenses. Be sure
to include your, loan repayments, property taxes, utility bills,
car/transport expenses, food, clothing etc.
Step 3: Subtract the total from your total income,
your total expenses and the total left over should be what you
have available to spend on your mortgage, should you wish.
It may seem like a hassle, and you may feel that
there is no need to bother with budgeting, but it can save you
worry and problems in the future - knowing exactly where you stand
financially will let you sleep easy and ensure that you keep on
top of your financial responsibilities.
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