April 2022 - Credit Connection

So many mortgage terms can throw off your confidence when you decide to get a home loan. It’s almost like they are speaking an entirely different language. Luckily, there are plenty of places that can break down these terms for you. While there are many to go through, we thought we would highlight these key ones.

Amortising loan

“The formal term for a standard principal and interest loan.”

Also known as “amortization” for those that watch too many Hollywood movies, it’s also how most loans are calculated. The interest is upfront, so when you are first paying off your loan, you won’t see a significant drop in the amount as you are paying off the interest.

Bridging finance

“A temporary loan used as a gap measure between buying your new home and selling the old one.”

If used correctly, this isn’t always necessary but is a powerful feature of some mortgages.

Comparison rate

“A rate which includes fees so loans can be compared on an equal basis (e.g. a loan with a low advertised rate but high fees might cost the same as a loan with a higher advertised rate but low fees).”

Contract variation

“Any variation or alteration to the terms of a contract.”

As with most contracts, there are standard clauses and terms within, but because of some real estate, lawyers, and settlement terms, these can be negotiated by the seller or the buyer.

Conveyancing

“Legal work carried out by your legal representative to transfer property ownership.”

Not all lawyers are the same, that’s for sure. This specialised law firms work on property matters only and are a must-have when buying or selling, even if the price tag makes you feel otherwise.

Daily interest

“Interest calculated on a daily basis. Most variable rate loans calculate interest on a daily basis.”

Navigating buying a property is hard enough without the minefield of terms, but we hope this helped clear the way. Contact our expert team today if you would like an expert to help cut through the jargon and help you understand mortgage terms, and help cut years and thousands from your mortgage.

Setting an entertainment budget means that being on the journey to less debt more life can be just as enjoyable as splashing out on your entertainment options. Putting a budget, and some forethought, into your entertainment needs and options, means that you can do more for less.

While the amount you could set aside for your entertainment budget will reflect your household income, most experts would suggest setting aside five to ten per cent of your total after-tax income on “extras”, including entertainment and recreation. Data shows that some are spending more than 20 per cent on these extras, which isn’t sustainable even though it might be a lot of fun.

Set a budget

Every home should have a budget; we have covered how to start a budget and what should be in your budget in other blogs. Having a budget, and more importantly, sticking to it, is the only way to achieve your financial goals. Entertainment might be an “easy” expense to cut, but not having any fun isn’t any fun.

Once you have covered your “must-have” expenses in your budget, items such as rent, mortgage payments, utilities, and food, you’ll better understand your options when it comes to entertainment.

Look to the future

We don’t mean getting out the ole crystal ball or the tea leaves, but what we mean by looking to the future is looking at the calendar of potential entertainment events that you might have to cover with your budget. Do you want to go away for the summer? Do you want to have a big BBQ for Labour Day? Putting those dates with amounts you’ll need to save can positively affect your saving. The knowledge that those fun times are coming might be just the motivation you need to keep to your budget.

Making sure that you don’t forget to enjoy life is essential to a happy life balance.

Something else that is important is to get expert advice about getting out of financial stress. If one of the most significant sources of your financial stress is your mortgage, the experts at Credit Connection have been helping people cut their mortgages for over a decade! Contact our team today for your risk-free consultation.

Less Debt More Life™

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