How to Lower your Expenses: Lowered Mortgage Expenses
Housing takes up a large part of most peoples finances. You, therefore, should find ways to keep that figure low, for you to be left with something on the side for your other expenses. You get to manage that when you arrange for a better deal for our mortgage. This is done when you lower your loan to value ratio. Here is more info about this concept, and how you can make it possible for yourself.
A loan to value ratio shall be what the bank focuses on to see the relationship between the money you wish to access, and the value of the property you will invest it in. This shall be a percentage that tells them what amount of risk level they are getting themselves into. The higher the percentage, the riskier it is lending you the amount you are asking for. A property that has a little equity automatically makes the percentage high. It will still be a loss to them to take the property to sell to pay off what you borrowed. If the percentage is low, then you can even access much lower interest rates.
The loan to value ratio is a division of the mortgage amount by the sale price of the house. The resultant figure is normally less than zero. The two numbers to the right of the decimal point shall then serve as the percentage. You can also arrive at a much simpler answer by using the LVR calculator, which keeps things simple. You can have a look at it on this site.
You need to find ways to have the loan to value ratio somewhere below 80%. This shall have most lenders viewing you as someone with a low risk to give money to. When you have a lowered percentage, you will be able to make substantially low monthly payment figures. These low figures shall leave enough space for you to find some money to spare for other things in your life. There are several ways you shall manage such a feat. A good place to start would be to get a larger down payment. The other thing to do would be to try and bring down the selling price of the house as much as you can. If you can get the price lowered, the ratio percentage shall automatically go down, when the calculation is done.
It is beneficial to understand what goes into calculating your loan to value ratio, and how to influence those variables in your favor. You need to see a lowered interest you can get, for any budget you have to work with. You shall find these and other helpful financial tips on this blog. You will thus discover more ways to keep the costs low, and thus to have more money open for spending.