Not having access to your savings is one of the most efficient ways to save for a mortgage. As long as you can access your savings, you may find yourself in a situation where you’ll need to utilize the money. The following are five amazing mortgage hacks to improve your financial standing.
1. Set Up an Offset Account
Setting up an offset account is one way of assuring that you won’t have access to the money meant for your mortgage savings. An offset account is a type that is linked to your home loan account.
When you deposit into the account, the home loan balance is offset. A home loan offset balance means that the difference between the loan amount and the amount in the offset account is what you will be paying. Consider researching how offset accounts can help you efficiently save for your mortgage.
2. Create a Budget
This one probably should have been first. Creating a financial budget is essential. It helps you shape your spending patterns.
When you have a financial budget, you know how much you allocate to various departments such as grocery, transport, bills, and luxury. When creating an efficient budget, analyze whether you can forego certain items on your list so that you free up more money.
3. Downgrade Your Lifestyle
If you live a lifestyle that doesn’t allow you to save for your home efficiently, you may need to downsize. Here are a few suggestions on how you can downgrade your lifestyle.
Lower Rent Costs
If the rent cost is high and only allows for groceries and transport spending at the end of the month, you may need to rent a lower-cost house. You may find that your house may be the biggest wage bill, and by making adjustments such as cutting on rent and maintenance bills, you may save for your mortgage better.
Your diet can also contribute to a lifestyle that makes saving for a mortgage difficult. You can cut down on buying fast food and rather create your meal plan which you prepare at home. Those who have the advantage of having gardens can grow their vegetables and fruits, which also cuts down on the grocery bill. Not only do you cut back on food expenditure, but you also get to enjoy a healthier lifestyle by the switch in food habits.
Cut Off Subscriptions
Subscriptions may affect your savings potential. Assess how many subscriptions, including telephone, television, and products you may currently be paying for that aren’t necessities. Saving for a mortgage may mean doing without certain luxuries and entertainment; however, this may be a necessary means to an end. Once you have achieved your housing goal, you can go back to enjoying the extra services that you would have gone without for a period.
Spend More Time at Home
If your lifestyle consists of frequently adventuring outside the home, you risk spending money you could be initially setting aside for your house. Consider spending more time at home where instead of watching movies in a cinema, you enjoy from home. Rather than going to the nightclub each weekend, you can invite friends to have a good time at your home.
4. Creating Multiple Streams of Income
Creating multiple income streams means that you can dedicate the extra streams to the savings of mortgages. Some ways of doing this won’t even require your time or physical effort, which may eat into your daily job mandates. Here are a couple of examples of how you can create multiple streams of income:
Get A Flatmate
Getting a flatmate means sharing rent costs and bills. For example, you can deposit the money you save as a result in an offset account.
Find Digital Minimal Tasks
You can work on minimal digital tasks in your spare time. Many platforms require remote work such as labeling products, customer service, and blog writing, which are flexible and convenient. The extra money you get from working these remote jobs can go into your savings account towards your mortgage.
5. Cut Down on Paying for Services
If you can tackle a task independently, you can save as you don’t pay for services. For example, washing your car on your own instead of going to the car wash or hiring someone to wash for you means you save. If you can mow the lawn, you don’t have to pay another for their services. The ability to perform a few tasks on your own depends on varying factors such as time and physical ability. Assess your situation and see where you can cope without paying for services.
Becoming a homeowner is an applaudable milestone that requires sacrificing a few luxuries to save for a mortgage. When saving, consider opening an offset account and creating a budget. Find ways to downgrade your lifestyle such as eating from home, and creating multiple income streams while independently tackling tasks.