For most of us, buying a house is the most expensive thing you’ll ever do, so it’s important that you plan and budget the best you can to make sure you don’t get yourselves in a financial mess at what is already a stressful time. There are a few things you can do to help save, or free up money.
If you are a first time buyer, or you are renting for the first time, one of the biggest outlays you will have is buying furniture for your new home. It is always a good idea to ask friends and family to see if anybody has anything they don’t need anymore, because you can almost guarantee that if you don’t, a months down the line, your friend will tell you about the sofa they have just taken to the tip because they couldn’t get rid of it. If you would rather not ask people if they have any old furniture, Facebook gives you a new way to post a list of what you need on the internet, and you may find that people you don’t even speak to anymore are more than happy to let you take something that has been sat cluttering up their house for months. If you still can’t find anybody to help you out, you could visit the Freecycle website which connects people who are looking for free household furniture and appliances with people who are wanting to get rid of them.
If you have taken out a new mortgage and need a bit of extra money once you have moved, to buy something, or get something fixed, there is a way to ‘raise’ a little bit of extra cash. With most mortgages or personal loans, the lender will ask you on which day you would prefer to have the payments taken from your bank. If say, you get paid on the 25th of the month, you ask the lender to set up your payments from the 1st of the month, then after your first month’s payment, ask them to move back the payment to the 28th. For example, if the first payment was due on the 1st June, you would then ask to move the second payment to the 28th of July, in which time you will have been paid twice, freeing up more money for you to use on other things when you first move in. You will need to speak with your lender to check that this is ok, and that it will not count as a missed payment, or that they will just charge you around double the next time, as well as remembering that you are only delaying the payment, and not actually saving any money. In fact, because most providers charge interest on a daily basis, it will cost you money in interest to do this, and so shouldn’t be used unless it is necessary. Remember, you would only be able to use this trick once, and it can only be used as a short term way of freeing money.
Finally, whenever you purchase anything for your home, which you require finance to buy, consider asking to purchase via a 0% interest credit agreement if it’s available rather than taking out a loan. It can sometimes be a first reaction to think you need to get a loan or a increase your mortgage when you need money for a big job, like a sofa or new windows for example, but if a 0% interest option is available, this is the best type of ‘loan’ you can ever get. The exception is where the seller charges more for you to use this facility. If somebody offers you something for £300 cash or £360 if you use interest free credit, then it isn’t really interest free.
Whatever your needs or circumstances, it is always best to speak with an independent financial advisor so they can give you an impartial view and guide you to the right mortgage for you. Kieron Bassett Financial Services has two Independent Financial Advisers. Contact us on (01524) 832057, via e-mail, info@kieronbassett.com, or visit www.kieronbassett.com.
Jason Hinde DipPFS
13th June 2011
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