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A little advice about mortgage. It affects families in the long run in a lot of ways. stress if money is tight. It can affect schooling costs for example children could miss out on excursions and other social events. clothing toys trips to the cinema holidays and again the list 
goes on.
Sometimes its hard to know that you are in financial trouble until it happens. Others think if they ignore it , it will sort itself out.
Preplanning is important here. At the first sign of problems the reigns need to be tightened.
Start by cutting down on unnecessary items. you dont have to give it away totally just cut down on it. put that money aside for the week dont use it on anything else and give it to the mortgage. The earlier you put it in the mortgage the better. that is if the loan is due monthly , pay it in 2 installments. if the loan is not at a fixed interest rate this will help the interest rate come down. Even if it is a small amount . in 12 months it adds up.
if you do have spare money pay a little extra on your loan . for example if your loan is 950 dollars a month, get into the habit of giving one thousnd dollars a month. That works out at an extra 600 dollars after a twelve month period. That way if you are in dire straits at apoint it gives you a little breathing space. sometimes enough to get back on your feet. but always discuss it with your loaning finance company
For instance,go in person to your financial institution and let them know that you believe that you are 600 dollars in front with your loan and this month you have unforeseen financial hardship IS IT OKAY IF I GIVE A BALANCE OF 350 DOLLARS? but make sure out of coutisy as well that you let them know. they will appreciate the fact that you have contacted them.
Also if you are lucky enough to have money put aside or a saving for a short term thing whether it be the childrens education . or a holiday or just an emergency set up 'AN OFFSET ACCOUNT " that means instead of earning interest your money is working in your favour and offsetting the interest you would pay on your loan.
The idea is that you still make your repayments of 1000 dollars a month but not only are you saving 50 dollars each month that you are giving extra towards your loan but you are being charged less interest. The more you have in the offset account the less interest you pay for your housepayment. The savings would vary on the amount of money you have in the account and whether you can afford to keep adding.
This system is great! sometimes better than just paying off extra money in bulk because it means you have access to your money when you need it. for example new car or house renovations or childrens schooling.
All these are little things that can help ease financial stress. it means you are more at ease and your mind is more relaxed to enjoy with the children. financial hardship makes us snap at our children and even if we dont snap at them , children sense that there is something bothering us. Which in turn can make them feel anxious and tense. This banking system works in Australia with some banking instituitions. i dont know about other countries. you dont have to pay tax on interest as you are not getting interest just 'OFFSETTING YOUR LOAN INTEREST
Another option is to change your banking institution. But make enquiries first. Depending on how many years you have been paying your loan by getting the institution to pay off the loan and drawing a new loan up your payments will be less. For example if you had borrowed one hundred thousand dollars and your repayments were 950 dollars a month and you have had the loan for 7 years and you mangaed to bring down the amount to 80000 then your repayments will be less with a new loan. do check however what the hidden charges are before you draw up a new loan eg do you pay a one off establishment fee? some banks dont charge if you become a new customer good luck i hope this advice will help someone cheers annie
(December 2007) (
