Managing your mortgage: best tips for a healthier relationship with your money

In an uncertain housing market, you want to make sure that you are financially stable. Stay on top of your debt with these valuable tips for managing your mortgage!


All you need to know about managing your mortgage

Drawing symbol of a family in a wooden house.
How to get the most out of a mortgage purchase? Source: Adobe Stock.

A mortgage is still a viable solution to making the dream of homeownership a reality. In 2020, it was estimated that at least 62% of Americans used this type of purchase to acquire land, houses or any type of property. However, it is impossible to get the most out of this type of purchase without managing your mortgage in the best possible way.

What can be a facilitating path to the realization of a dream or life goal can turn into a nightmare. Therefore, it is necessary to plan well to make the most of the advantages that buying a property through real estate financing can bring.

Therefore, to help you in this endeavor, we have gathered the main expert advice when it comes to mortgages. That way, you will know how to save, not harm your income and achieve your goal in the best possible way.

So, check out our article and find out everything you need to know about mortgages.

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Want to learn how to manage your mortgage? These tips will help you get started on the right foot!

For those who are starting their research on the subject, here is a brief definition of what a mortgage is. It is a way to acquire a high-value asset (usually a house or land) without having to deposit all the money at once.

Through the mortgage, you can divide the value of a property into monthly installments while you enjoy it as if you were already the owner.

However, the original owner can claim the property if you fail to pay a certain amount in installments, for example. This is usually well expressed in the contract signed between both parties.

If this happens, in most cases, the buyer is not entitled to receive the amount paid back. That’s why you need to put together a good strategy so you don’t turn the realization of your dream into reality.

However, to avoid problems with your mortgage, simply follow the following advice:

Plan your budget

pile of money (coins) with blurred wall clock behind
Understand why budget planning is so important for those who are going to buy a property with a mortgage. Source: Pixabay.

The purchase of very high-value goods (no matter which one!) requires good financial planning. In fact, it offers a safety margin so you don’t have any nasty surprises along the way. This is why planning your budget is so important to managing your mortgage.

In the beginning, it is important that you calculate your family’s monthly costs. Add up all fixed expenses (electricity bill, water bill, grocery shopping and others). That way, you’ll know what your basic living costs are.

Comparing this amount with your monthly income, you will know what your balance is at the end of each month. From this balance, reserve a percentage for occasional expenses (tours, shopping, leisure…).

The remaining amount of your budget must be saved. The idea here is to save money until the total amount of that “savings” equals at least six months of your basic living expenses + six months of your mortgage value.

That way, in case you have an unforeseen event (dismissal, for example), you will have “financial breath” to pay your costs while you reorganize. This calculation also lets you know how you can educate your consumption to spend less and save more.

Don’t forget the expenses to maintain your home

In fact, now that you are living the dream of your own home, you should be aware of the expenses that may arise. However, you may need to pay for plumbing repairs, electrical installations, painting, in short, general repairs.

In addition, rainy (or snowy) periods usually generate expenses mainly due to roof damage. If you do not have a financial reserve ready to meet these demands, then you will need to take out a loan, which is not interesting.

If you’ve done a good budget planning, worries about expenses like this become minimal. Either way, keep an eye on these “predictable” expenses, this will ensure you’re managing your mortgage in the best possible way.

Don’t forget to pay your mortgage installments on time

miniature house, tenure document and keys (managing your mortgage).
4 essential tips to manage your real estate financing and get the best out of this type of purchase. Source: Pixabay.

In fact, this sounds like one of those silly tips, put into lists just to add to them. However, it is incredible the number of people who simply forget to pay this amount and end up accumulating interest, which makes the debt even greater.

Thus, there are already technological resources to help people with not-so-good memory. In fact, a large number of credit cards allow automatic scheduling of payments.

That way, you can even forget about your mortgage and just get notifications to know it’s already been paid. Therefore, it is important to consult your bank and find out how this type of scheduling can be done.

Always pay more than the minimum

As with regular loans, interest is charged on the value of your mortgage. Therefore, the longer you take to pay this amount, the more interest you will pay. Therefore, it is important that you seek to pay off your debt as soon as possible. Consider this aspect when thinking about managing your mortgage.

How? Paying more than the minimum. Thus, with financial planning, you can organize yourself to pay an amount greater than the minimum installment of your real estate financing in a few months.

In this way, you will be reducing the value of the installments by “paying them in advance” and avoiding interest charges. Thus, at the end of the entire process, you will pay a lower amount than stipulated at the beginning

In addition, in situations that your budget allows, you can advance a full installment. This will make your mortgage complete even faster.

Finally, we finalized the four most important tips according to experts when it comes to mortgage. In fact, finances are a very relevant subject in our lives and are directly related to our ability to fulfill ourselves and achieve goals.

So learning about personal finance never hurts. If you want to continue learning about it, click on the link below and read an exclusive article on personal finance.

Businessman works on analyzing financial data using a calculator and writing notes with calculations

How to get started with personal finance: learn 4 tips

Are you looking for some tips on personal finance? Here are our top tips for managing your money and reaching your financial goals!

About the author  /  José Gonçalo

I started reading about finance only to find better options than savings. Since then, I have never stopped studying finance, and I believe that writing about it is the best way to help individuals feel fulfilled and have a healthy financial life. Today, I balance finance and medical school studies.

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