How to Lower your Expenses: Lowered Mortgage Expenses
There is a significant amount of our money that goes to the cost of housing. This figure needs to be lowered, if you expect to have more disposable income for other areas of your life. A good way to do that would be to arrange for a better deal for your mortgage. This is done when you lower your loan to value ratio. Here is more info about this concept, and how you can make it possible for yourself.
A loan to value ratio shall be what the bank focuses on to see the relationship between the money you wish to access, and the value of the property you will invest it in. This shall be a percentage that tells them what amount of risk level they are getting themselves into. The higher the percentage, the riskier it is lending you the amount you are asking for. When the property holds only a small equity, the risks involved shall automatically be high. It will still be a loss to them to take the property to sell to pay off what you borrowed. Where the percentage is low, you shall give favorable interest rates.
To get the loan to value ratio, you shall divide the mortgage amount by the sale price of the house. This usually gives a figure less than zero. The two numbers to the right of the decimal point shall then serve as the percentage. For those who find that to be too much calculating, there is an LVR calculator that keeps things simple. You can check it out on this site.
You need to find ways to have the loan to value ratio somewhere below 80%. Most lenders view that as the low-risk threshold. With such a lowered percentage, you shall manage to make your monthly payments much lower. These lowered payments shall open up your chances of accessing some disposable income to use in other things in your life. You can do so by using various tactics. You shall first have to get a larger down payment. The other thing to do would be to try and bring down the selling price of the house as much as you can. When you get the price lowered, the ratio percentage shall automatically go down as the calculation is made.
You need to know what happens when the loan o value ratio is worked out, and how to influence those calculations. You need to see a lowered interest you can get, for any budget you have to work with. You will find these strategies and others on this blog. You shall discover more ways to keep your spending to a minimum, to access more disposable income for your development goals.