How To Lower Your Monthly Housing Expenditure - Ways To Cut Homeowner's Costs
Housing costs account for at least 25% of most homeowners’ monthly expenditure, so it is definitely worth looking for ways to cut down on them and generate savings - without necessarily having to move. According to the experts, the best time to start this budget exercise is before you even move in by not choosing to buy a home that is more than you actually need. With the strict National Credit Act to consider, it is unlikely that your lender will allow you to buy more home than you can afford, but even that may be more than you really need.
Consider the size of the house you need, not the one you want
What you need to do first is think very carefully about how many bedrooms, bathrooms, and living rooms you and your family will require and use over the next five to seven years. Once that’s decided, you can then set out to find a compact (but not cramped) home that meets your specifications as closely as possible. Having unused rooms is like throwing money away, month after month, in unnecessarily high bond repayments, and having more space than needed will also result in pointless cleaning and energy sacrifice, not to mention lots of unnecessary costs, particularly with regards to maintenance.
Similarly, you should think about the size of the stand or garden you need before you buy. It may be great to have lots of space for children to play or a big poolside patio for entertaining, but a large property usually also means higher bond repayments and more upkeep, as well as higher security costs and higher municipal rate payments.
Save for a down payment
The second way to significantly lower your monthly housing cost is to save up until you can put down a deposit of 10% or even 20%. The larger the deposit, the smaller the home loan you will need, and the lower your monthly bond repayment will be.
In addition, paying a deposit will enable you to save a large amount of interest over the life of your home loa – as indicated in the accompanying table - even as you enjoy the benefit of the lower monthly repayments.
Source - BetterLife Home Loans