This is likely to be your single biggest cost, and therefore has the potential for the biggest saving. The large amounts involved mean that even a small difference in interest rates can have a significant impact on what you pay. The fact that you are going to be paying it for so long is another reason to examine it closely and regularly. A relatively modest change per month could save you thousands over the term of your mortgage.
If you do consider changing to a new lender, you will need to know if there are any penalty charges for leaving your current mortgage early, for more details visit to www.positive-idea.com as this will need to be allowed for when you are calculating what you might save. Ask your lender to confirm the total costs involved in closing the mortgage. You must also consider legal costs and any fees for setting up the new mortgage.
Save Money - Pay Off Debts First Instead of Saving
This feels counter-intuitive when we are always told we need to save more money, but it does not make financial sense to put money in the bank if you have debts that are costing you money in interest. Pay off your debts first.
The rationale behind this is very simple - the interest you pay for borrowing money is ALWAYS more than the interest you will get from having money in the bank (with the odd exception such as special short term offers on some credit cards). This has to be the case - it is the basic operating system for banking. They give you a bit of interest for the money you deposit with them, so that they can lend it out to someone else and charge more money. The difference between the two rates is their profit.
Save Money - Review Your Energy Suppliers
You really do have to keep a close eye on your gas and electricity supplier these days. This is a constantly shifting field and you need to compare the rates about every six months or so. Try to leave it until just after there has been a big price change. Once one supplier changes their prices, the others usually follow in a few weeks, for more details visit to www.make-ezee-money.com then it should be fairly stable for a while and that is the time to change.
The easiest way to compare prices is on one of the comparison websites. They make it very easy to swap now, and you can often get incentives for changing through them, such as cash back or vouchers.
It is usually cheaper to pay by direct debit, but you should always check your actual meter reading every month rather than rely on the company's estimates. They seem to go for ages without bothering to read meters at the moment, and their estimates can be wildly out, so to avoid being lumbered with an unexpected bill a year down the line, check what you are actually using, give them your meter readings, and pay the correct amount.
Save Money - Credit Cards
This is a huge area and I could write many articles on credit cards alone, but for our purposes here, the main point is that you should not sit back and just make the minimum payment each month. Ideally, you need to try to pay your cards off in full each month. If you can't do that, you are storing up problems for the future.
Assuming you do have some debts on credit cards and can't afford to pay it all off in one go, you should at least set up a direct debit to make a fixed payment each month, based on the very most that you can afford. The credit card companies want you to just make the minimum payments, because then you pay them interest for a very long time, which is how they make their money.
The extra cost to you in just making the minimum payments is huge - the less you pay each month, the longer you take to pay them off and the more interest you pay. The other advantage of setting up a direct debit to pay your cards is that you make sure you don't miss any payments by accident and incur any needless penalty charges.
Money Pay Off Debt
Take a look at your savings account statements to see how much interest you're earning. Now take a look at your creditor's statements for the debts you have. You are probably being charged more interest on your debts than you are earning on your savings.
If the interest rate on your debt (say a credit card) is 13 percent, you would have to find a savings option with an interest rate equal to or greater than 13 percent to make additional money.
An easy way to get a big picture view of your debts is to write them down. Make a list of your debts by creditor name, amount owed, and interest rate. List them in the order of highest interest rate to lowest interest rate.
How can we eliminate this high interest debt? Several ways are: putting the card away so you don't put additional charges on it, paying more than the minimum amount due each month, transferring the balance to one of your lower interest rate cards.
And additional ways to lower interest debt are: getting a lower interest rate debt consolidation loan and enrolling in a credit assistance program.
So far it may sound as if paying off debt before investing in savings is the best option. Most financial experts recommend budgeting 5 to 10 percent of your income monthly for savings. So what should you do? Here are some options:
Pay off debt before investing in savings. This will look good on your credit profile, but you won't have a financial cushion if you need it.
Make the minimum payment required on your debt and create a savings account. This will give you a financial cushion, but it will prolong the life of the debt and may cost you more money in the long run.
Find a balance between paying off debt and investing in savings. Paying off debt now while working toward building a savings puts you in control of your money. Pay a little more than the minimum payment required on your debt and put the rest into your savings.
Now the solution becomes very personal. You must look over your "big picture view of your debts" because yours is yours alone. And only you know the monthly income for your household and must decide what is best for you.
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