We all remember buying our first car. It was exciting; we not only enjoyed that sense of owning something of value, but it also gave us a sense of freedom. That was until we forgot to have the vehicle properly maintained and we ended up with a hefty bill. Then that sense of independence dissipated.
The same can also be said of a home loan. Many of us get excited about buying a home. We research the mortgage industry at length to find the best rate and home loan package, and then we make a move. But, as we witnessed with our first car, without proper maintenance and care, we can be paying more than we need to later-on down the track. This is why it’s recommended that you review your home loan regularly to make sure it’s running efficiently so that you get the best mileage out of it.
How Can I Service My Home Loan to Get the Best Mileage?
1. Check the basics – As a car owner we need to check the oil and water in our vehicle to ensure that it runs well. Otherwise you may find yourself stranded. The same can be said of your home loan. Check your interest rate regularly. Then ask yourself if it’s similar to other interest rates on the market or if it’s much lower or higher. If it’s lower, then you may want to consider if you can afford to pay more off your home loan to reduce your principal faster. If it’s higher, then you may need to look at how you can budget better by spending less and saving more.
2. Service your home loan – We have a home loan for far longer than a car, and yet, most of us never have our home loan reviewed by a professional to make sure that it is working effectively. A mortgage broker can help you review your existing mortgage and compare it to others on the market. This will allow you to see how well your mortgage is working and if, and where, you can fine tune it.
3. Insure your asset – Unexpected events can, and do, happen. Cars can be involved in accidents or can be stolen or even catch fire. If you’re not insured then you can risk losing the value of your asset. When it comes to a mortgage your home loan can be the same. Having life, disability and income protection insurance can cover your home loan payments should you pass away, become ill, incapacitated, or lose your job.