How To Beat The Credit Crisis
7 Simple Strategies to Make Your
Home Loan More Affordable
We all sit on the verge of the greatest Financial Credit Crisis experienced since the Great Depression of the 1930's. Many people over the next year or two will struggle with their home loan, and even though the recent interest rate cuts will certainly help, rising prices across the board will still mean being a good custodian of your money will make all the difference.
The information below will provide you wilth some ideas that you can implement right now to help you get the most from your home loan.
Interest Rates Alone will Not Solve the Problem
People, who currently have a mortgage and already devote a large portion of their incomes into home ownership. Higher food and petrol prices not only makes it tougher every day, it also makes getting into your first home that much more difficult.
Many would be first home owners will now decide that owning a home of their own is too far out of reach and no longer be dedicated owning to a home of their own, instead it could lead to their hard earned money going the way of the Plasma TV, the new car and the new electronic gizmo that does everything except make phone calls.
The effect of this redirected spending into consumer goodies is… you guessed it, increasing inflation. Wasn't this where we came in?
How Can Anything I Do Help Avoid The Worst of The Credit Crisis?
Over the past few weeks I have been working with a coupe of people who frankly have been struggling financially. When they heard the news of the latest interest rate rise, it hit them like someone had thumped them in the stomach.
They just could not see how they would find the extra money they would need every month to cover the increase. They were at the end of their rope.
I Don't Like to See Anyone Struggle Financially
Now I don't like seeing anyone struggle with their finances, especially a hard working couple with young children. So I went to work with them, lets call them Trevor and Lynne, on finding ways to relieve some of the burden of their increased loan repayments and pull some of the teeth out of the interest rate increase.
The Seven Saving Strategies To The Credit Crisis
1. Switch Their Home Loan Over to Interest Only
This is a short term way to reduce your loan repayments and should only be used as a quick fix when times are tough and for a limited amount of time - usually no more than 12 months in the case of your own home. In Trevor & Lynne's case this would reduce their monthly Home Loan payment from $2,107 per month down to $1,894, a saving of $213 every month. Please note that with investment properties, Interest Only loans are quite normal, and they can help reduce your tax.
2.Combine All Your Credit Accounts Into Your Home Loan
This is one of the best ways to save a lot of money in unnecessary loan interest. By doing this Trevor & Lynne would save an extra $215.00 every week without any changes to their lifestyle at all.
