How to Manage Home Mortgage Better

A house is the main asset for most families. Just like a home needs maintenance, a home mortgage also needs some care over the years.

Here is how to manage a home mortgage, keep in straight and protect your asset, in both good and bad times.

1) Avoid large investments and buying

A big empty home can be tempting. The new owners can easily go into a shopping frenzy. All the things might seem important, including big TV, elegant furniture, quality carpet or brand new appliances. It is exciting at first but when the bills start to arrive, it’s not a good scenario.

Try to make home improvements in installments. Don’t let these expenses overwhelm your monthly budgeting plan. Plan and save up to buy large purchases one by one. Allow yourself a few weeks to adjust your monthly income to accommodate the new mortgage loan.

2) Getting used to new expenses

Every household has a specific general monthly budget plan. When you switch a home, importantly a bigger home, this will change your monthly budget significantly. The utilities, including electricity bills, might be very shocking at first. Similarly, the water bill, maintenance, internet bill, cable fees – everything will change.

Before applying for a home loan in Egypt, it’s important to take into account the estimated new expenses according to locality. Make sure you have the budget to accommodate these new payments on monthly basis.

It’s always best to consult a bank first, like for instance the National Bank of Abu Dhabi in Egypt or any other good bank you trust, to assess the monthly mortgage payments and see if it will fit within your budget.

3) Maintain funds for the coming 6 months

When people get a mortgage loan, they are optimistic about their financial condition and the market for the foreseeable future. But minor and major hurdles are a part of life and can occur at any point. It may be illness or plumbing problems, which might make you stay at home for a few weeks or increase the expenses quite a bit.

It’s important to have a safety net when you get a home loan, for at least the next 6 months. To better protect your family, your asset and your credibility, maintain a 6-month reserve to help you get through rainy days and manage your living expenses if it comes to that.

4) Pay your mortgage on time

Regular and on time payment of the mortgage is the best way to manage your home loan in Egypt. Late payments will just keep on increasing the penalties and stack up, which will make your credit score down.

5) Rent a room

An easy way to make some extra money and quickly repay your loan is to rent a room in the house. It will sacrifice your quality of life but it will make things easier in the long term. Sometimes it can even reduce your mortgage term to half.

With a few cautious steps and persistence over the years, a home loan can be easily managed.

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