Paying bills is always stressful, but paying your mortgage is on a whole other level. Worst comes to worst, a struggling homeowner can make do without their phone or air conditioner. But falling behind on your mortgage puts you in danger of losing the roof over your head entirely.
Here are some helpful tips for getting your home payments under control:
Be Aware of Your Limits
Whenever money is involved, it’s important to know your own limits, whether they be financial, organizational, or psychology. When applying for a mortgage, a house payment calculator can help you get an idea of what resources you have versus what resources you’ll need.
Keep to a Strict Budget
Money goes fast, often faster than many of us anticipate. That’s why it pays to create a meticulous budget and stick to it. Know how much money you have coming in. Know how much money you need to cover your mortgage and other essentials like food, gas, insurance, and utilities. Know how much money you want to put in your savings. What you do with what’s left is up to you.
Make Payments on Time
In some ways, mortgage payments are easy to manage. They’re predictable both in terms of frequency and cost. The problems start when you begin falling behind. Not only do late payments negatively affect your credit and your standing with your lender, they also come with expensive late fees.
Have a Backup Plan
When you apply for a mortgage, you usually do so with the assumption that your income will remain consistent for the lifespan of your loan payments. That doesn’t always happen. It’s a good idea, then, to put aside extra money in an emergency fund in the event that you or someone else in the household loses their income stream, or if unexpected complications (like car repairs or medical issues) eat into your budget.
Make Extra Payments
This isn’t always an option, but, if possible, you should consider making extra mortgage payments in addition to your scheduled ones. This can help you inch closer to the finish line, while also lowering your final interest costs.
Claim Tax Deductions
Saving receipts can pay off big when tax season rolls around, especially when it comes to household repairs, maintenance, or renovations. You may be able to write off such expenditures as tax deductions, which can lighten the load of your mortgage payments.
Refinance Your Mortgage
No matter how good or bad with money you are, there’s no guarantee that things will go how you want them to. Accidents happen and emergencies are unpredictable. If you find yourself in a bad financial situation and are nervous about your ability to consistently make mortgage payments on time, don’t put it off. Get help as soon as you can. One way to do this is to refinance your mortgage to make things more manageable.