For most of us, buying a house is the single biggest financial commitment of our lives.
This is why it is important to make the most of your mortgage.
The simplest of mistakes can cost you tens of thousands over the lifetime of the loan, and in these hard economic times we need to save every penny that we can.
So let me explain a few techniques to save you money on your mortgage.
If you are buying a house, you will most likely have to get a new mortgage.
This can be a complicated and confusing business.
Luckily there are some tried and tested ways to ensure you choose wisely.
First off you need to compare the monthly payments, taking into account any introductory rates.
Then use a mortgage calculator to compare the cost of the mortgages over their whole term.
This step is crucial in order to make a truly informed decision.
If you already have a mortgage and you think you are comfortable with it, then you may be missing a trick.
Many mortgage lenders allow you to overpay a certain amount, either in a lump sum or on a monthly basis.
Though this may seem to cost you more money in the short term, it actually means you are both reducing the interest on the mortgage, plus some of the capital too.
The effect of this is that either your future payments will be smaller, or you will pay your mortgage off more quickly.
Either way, you will save a lot more money than you spend by overpaying.
Many people stick with the same mortgage that they first took out on their property.
In fact mortgage lenders rely on this inertia to make them money.
The truth is that over time, the interest rate on your mortgage becomes uncompetitive.
So unless you have to pay a hefty penalty for switching, you should seriously consider re-mortgaging.
When you contact your mortgage lender to enquire about switching, there is a good chance that they will offer you a better deal on the spot, so a simple phone call may be all it takes to save you thousands.
If not, then a little more effort to find a more competitive deal may be even more rewarding.