Deciding to build your own home is an exciting time. Choosing the location, the design and the finishes yourself means that you can create your dream home from the ground up.
However, this process can also be a bit daunting, especially when you start working out how much all of it is going to cost. Taking out a house building loan is a wise move, but it is essential to manage your debt in smart ways to ensure that you keep your head above water at all times.
Read on for some top tips on managing your building loan for the best possible outcome.
Make A Budget And Stick To It
Repaying your house building loan is a big responsibility, and managing your finances should not be left to chance. Set a budget that considers all sources of income and a comprehensive, realistic list of expenses for your household. Build into your budget a safety net that keeps funds in reserve to cover your costs for three to six months.
While managing your debt, it is vital to stick to your budget and avoid any frivolous spending. Keeping a monthly record of your income and expenditure to compare to your budget is an excellent way to monitor your financial situation on an ongoing basis.
Channel Excess Funds To Your Monthly Repayments
If you find yourself fortunate to have excess funds on hand at the end of each month, you would be well advised to channel this into your house building loan. Every additional amount repaid reduces your interest burden and, in the long run, can reduce the duration of your loan. One of the most significant expenses on your house building loan is the accumulated interest; you should be looking to minimise this whenever possible.
Talk To The Experts About Your House Building Loan
If you are planning to take out a house building loan, you are well advised to speak to the experts first. Contact your mortgage and insurance broker to advise you on things such as loan structure, budgeting and interest rate forecasts. If you already have a loan, it is also prudent to consult experts on an ongoing basis to keep tabs on current trends in the market and to get the best advice for handling your debt.
Contact Simpler today to find out how we can streamline your house building loan account and help you reduce the final amount that you will repay in the end. We work with all major banks, lenders and insurers to get you the best deal.