In this article:
The new year is a time for resolutions and fresh starts. If one of your resolutions for 2023 is to get your finances in order, you’re in luck! Here are five tips for sticking to your mortgage budget in the new year.
1. Track Your Spending
Tracking your spending is a crucial part of budgeting for your mortgage. It requires you to be mindful of all the money that comes in and out of your bank account, from big expenses like rent payments to small purchases such as coffee or snacks. By writing down all of your expenses on a daily basis, you can get an accurate picture of where your money is going each month and how much needs to be allocated towards mortgage payments. Doing this will help ensure that you stay on top of repayments throughout the year and remain in control of your finances.
The big question is: how do you start budgeting when you’ve never done it before?
Setting up a budget spreadsheet is one of the best ways to keep track of your finances and ensure that you’re staying on top of your mortgage payments
When setting up a budget spreadsheet, there are several basic steps you should take. The first step is to list all of your monthly income sources, such as salary or investments. Then enter all of your monthly expenses, including rent payments, utilities bills and other living costs. Be sure to include any irregular or unexpected expenses that may arise during the year as well. You can also add categories for savings goals or debt repayments if needed.
Once all of your income and expenses are listed on the spreadsheet, it’s time to calculate the total amount available for mortgage payments each month. To do this, subtract total expenses from total income and subtract any savings goals or debt repayments that have been added in additional categories; this will give you an accurate picture of the amount available for mortgage payments each month.
Finally, set up different columns in the spreadsheet for tracking past payments and upcoming payments so that you can stay on top of due dates throughout the year. This will ensure that any changes in payment amounts are recorded accurately throughout the year and make it much easier to manage when it comes time to make those all-important mortgage payments each month!
2. Set Up Automatic Payments
Once you have determined the amount of money you need to allocate each month towards your mortgage payment, set up an automatic payment so that the payment is made on time every month without fail. Not only will this ensure that there are no late fees or missed payments but it will also make sure that you stay within your budget.
Learn how much you can save through refinancing.
3. Adjust Your Budget Periodically
As life changes, your financial needs may change as well. That is why it’s important to periodically adjust your budget so that you can stay on top of your mortgage payments. Take a look at how much money you are able to allocate each month towards your mortgage and make any adjustments if necessary. It’s best to sit down once a month to check your spending habits and to assess whether you need to adjust your budget or not.
4. Consider Refinancing
If you find yourself having difficulty with paying off your mortgage, consider refinancing your loan in order to lower the interest rate or extend the repayment term of the loan. This will help ease the burden of making larger monthly payments and give you more time to pay off the loan without accruing extra fees or charges.
5. Get Help if Necessary
If you are in need of more serious help with your mortgage payments, don’t be afraid to reach out. There are many organisations that can provide advice and assistance for those struggling with their mortgage payments. Depending on your situation, there may be government programs or other options available that can help make managing your finances easier.
YBR Earlwood mortgage broker and branch principal, Effie Nicol, says that if you’re finding it hard to manage your mortgage repayments these days you are not alone. The good news is that there are things we can do to help you manage.
Your broker can help you analyse your expenses and determine whether there are changes you can make to your repayment structure to ease the financial pressure.
Many lenders have hardship arrangements which allow you to temporarily pause or reduce your repayments, or extend the term of your loan, so you can get a handle on your finances.
Your broker can also help you look at refinancing to find a more affordable loan for your circumstances.
If you are worried about making your repayments, reach out to us today to give yourself the best chance of success in 2023.