Purchasing a home is a significant financial commitment and managing your mortgage effectively can lead to substantial savings over time.
There are smart ways that provide practical strategies to help borrowers effectively manage and reduce interest payments, while enhancing long-term financial well-being.
Remember that maintaining a comprehensive budget is essential, covering not only mortgage payments but also other housing-related expenses such as property taxes, insurance, maintenance and utilities.
Additionally, building an emergency fund is imperative to address unexpected costs like job loss or major home repairs.
Regular reviews of the mortgage and overall financial situation, consulting with mortgage advisers, ensuring adequate insurance coverage, taking advantage of prepayment options and maintaining good credit hygiene are all vital practices to manage mortgages effectively and achieve long-term financial stability.
Here’s a breakdown of key points to consider.
1. Refinance with a lower interest rate
One strategy recommended is refinancing, which involves replacing your existing mortgage with a new one at a lower interest rate.
By checking and improving your credit score, you may qualify for better rates.
Lower interest rates can significantly reduce your monthly payments, providing tangible savings over the entire loan term.
However, it is important to note that there fees are applied when refinancing a mortgage.
2. Eliminate mortgage insurance premiums
Another tip is to eliminate mortgage insurance premiums provided you have decent existing cover.
This reduction in monthly expenses allows you to contribute the saved amount towards higher principal recovery, effectively decreasing the interest component of your mortgage payments.
This strategic move not only eases financial burdens but also accelerates the equity building process in loan repayment.
At the same time, we need to acknowledge the value of mortgage-related insurance and take an informed decision only if you already have adequate cover.
Life insurance is a safety feature for home buyers and banks as well. It protects the borrower’s legal heirs and bank in case of an unfortunate event of the borrower’s death or permanent total disability.
In such events, the whole mortgage obligation is settled by the insurance provider with the bank and property becomes free from financial obligation.
Similarly, in property insurance, if there is a natural calamity such as earthquake, flood or any "act of God" and the property is no longer habitable, insurance companies are obligated to settle the outstanding loan with the bank.
3. Debt restructuring
This process typically involves negotiating with creditors to either reduce the principal balance through lump-sum payments or adjust the repayment terms to better align with the borrower's current financial situation.
One aspect of debt restructuring involves making lump-sum part payments towards the outstanding principal balance.
By doing so, borrowers can effectively reduce the overall amount owed, which not only decreases the financial strain but also accelerates the journey towards debt freedom.
These lump-sum payments can come from various sources, such as savings, investments or even asset sales.
Additionally, debt restructuring may entail renegotiating the terms of the loan, such as extending the repayment period, lowering the interest rate or converting variable-rate loans into fixed-rate ones.
These adjustments are made based on the borrower’s ability to repay, ensuring that the revised terms are more sustainable and conducive to long-term financial stability.
By engaging in debt restructuring, borrowers can actively manage their financial obligations and regain control over their economic well-being.
4. Switch to a fixed-rate mortgage
For borrowers with adjustable-rate mortgages, switching to a fixed-rate mortgage could be an option.
This transition provides greater stability and predictability in monthly payments, shielding you from potential interest rate fluctuations in the future.
However, they do come with fixed terms and homeowners will need to reassess this option before it expires as the interest rate could increase and affect payments.
5. Interest offset option
Linking a savings account to your mortgage for an interest offset is another savvy strategy.
This allows you to cut down the interest part from a loan repayment using the balance in your savings account.
The result is a reduction in effective interest rates while maintaining liquidity, providing a balanced approach to mortgage management.
6. Interest hedging through SIP
Consider systematic investment plans (SIP) as a tool for disciplined and regular investments.
SIPs can act as a hedge against rising interest rates, offering benefits such as risk mitigation and consistent savings.
Switching to a fixed-rate mortgage provides greater stability and predictability in monthly payments
Rajender Prasad,
managing director, Money Maestro
7. Accelerated loan repayment
Gradually increasing your repayment by a certain percentage, even if it's a modest 2 per cent to 3 per cent, can have a cumulative impact over time.
This ensures that your loan payments keep pace with your income growth, allowing you to allocate more funds towards the principal amount.
8. Regular partial settlements
Lastly, it’s crucial to highlight the importance of regular, small partial settlements.
Making one additional instalment annually as a partial settlement contributes not only to consistent progress towards debt, but also cultivates financial discipline and leverages the power of compounding.
This approach aligns with long-term savings goals and reinforces a proactive approach to mortgage management.
Rajender Prasad is managing director of Dubai-based independent mortgage advisory firm Money Maestro
More on animal trafficking
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
More coverage from the Future Forum
More on animal trafficking
More from Neighbourhood Watch:
Destroyer
Director: Karyn Kusama
Cast: Nicole Kidman, Toby Kebbell, Sebastian Stan
Rating: 3/5
UAE release: January 31
KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
The specs
Engine: 5.0-litre V8
Power: 480hp at 7,250rpm
Torque: 566Nm at 4,600rpm
Transmission: 10-speed auto
Fuel consumption: L/100km
Price: Dh306,495
On sale: now
The five pillars of Islam
More on Quran memorisation:
Killing of Qassem Suleimani
It's Monty Python's Crashing Rocket Circus
To the theme tune of the famous zany British comedy TV show, SpaceX has shown exactly what can go wrong when you try to land a rocket.
The two minute video posted on YouTube is a compilation of crashes and explosion as the company, created by billionaire Elon Musk, refined the technique of reusable space flight.
SpaceX is able to land its rockets on land once they have completed the first stage of their mission, and is able to resuse them multiple times - a first for space flight.
But as the video, How Not to Land an Orbital Rocket Booster, demonstrates, it was a case if you fail, try and try again.
Killing of Qassem Suleimani
Killing of Qassem Suleimani
More from Neighbourhood Watch:
About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
The years Ramadan fell in May
Zayed Sustainability Prize
More from Neighbourhood Watch
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
More from Neighbourhood Watch
More from Neighbourhood Watch:
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
MATCH INFO
Final: England v South Africa, Saturday, 1pm
1,000 Books to Read Before You Die: A Life-Changing List
James Mustich, Workman
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
CHATGPT%20ENTERPRISE%20FEATURES
%3Cp%3E%E2%80%A2%20Enterprise-grade%20security%20and%20privacy%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Unlimited%20higher-speed%20GPT-4%20access%20with%20no%20caps%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Longer%20context%20windows%20for%20processing%20longer%20inputs%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Advanced%20data%20analysis%20capabilities%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Customisation%20options%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shareable%20chat%20templates%20that%20companies%20can%20use%20to%20collaborate%20and%20build%20common%20workflows%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Analytics%20dashboard%20for%20usage%20insights%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Free%20credits%20to%20use%20OpenAI%20APIs%20to%20extend%20OpenAI%20into%20a%20fully-custom%20solution%20for%20enterprises%3C%2Fp%3E%0A
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
The years Ramadan fell in May
MO
%3Cp%3E%3Cstrong%3ECreators%3A%20%3C%2Fstrong%3EMohammed%20Amer%2C%20Ramy%20Youssef%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EMohammed%20Amer%2C%20Teresa%20Ruiz%2C%20Omar%20Elba%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
More from Neighbourhood Watch:
Zayed Sustainability Prize
The five pillars of Islam
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
The years Ramadan fell in May
Killing of Qassem Suleimani
More from Neighbourhood Watch:
Structural%20weaknesses%20facing%20Israel%20economy
%3Cp%3E1.%20Labour%20productivity%20is%20lower%20than%20the%20average%20of%20the%20developed%20economies%2C%20particularly%20in%20the%20non-tradable%20industries.%3Cbr%3E2.%20The%20low%20level%20of%20basic%20skills%20among%20workers%20and%20the%20high%20level%20of%20inequality%20between%20those%20with%20various%20skills.%3Cbr%3E3.%20Low%20employment%20rates%2C%20particularly%20among%20Arab%20women%20and%20Ultra-Othodox%20Jewish%20men.%3Cbr%3E4.%20A%20lack%20of%20basic%20knowledge%20required%20for%20integration%20into%20the%20labour%20force%2C%20due%20to%20the%20lack%20of%20core%20curriculum%20studies%20in%20schools%20for%20Ultra-Othodox%20Jews.%3Cbr%3E5.%20A%20need%20to%20upgrade%20and%20expand%20physical%20infrastructure%2C%20particularly%20mass%20transit%20infrastructure.%3Cbr%3E6.%20The%20poverty%20rate%20at%20more%20than%20double%20the%20OECD%20average.%3Cbr%3E7.%20Population%20growth%20of%20about%202%20per%20cent%20per%20year%2C%20compared%20to%200.6%20per%20cent%20OECD%20average%20posing%20challenge%20for%20fiscal%20policy%20and%20underpinning%20pressure%20on%20education%2C%20health%20care%2C%20welfare%20housing%20and%20physical%20infrastructure%2C%20which%20will%20increase%20in%20the%20coming%20years.%3C%2Fp%3E%0A
Killing of Qassem Suleimani
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
KILLING OF QASSEM SULEIMANI
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Killing of Qassem Suleimani
Bridgerton%20season%20three%20-%20part%20one
%3Cp%3E%3Cstrong%3EDirectors%3A%20%3C%2Fstrong%3EVarious%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Nicola%20Coughlan%2C%20Luke%20Newton%2C%20Jonathan%20Bailey%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A
The%20trailblazers
%3Cp%3ESixteen%20boys%20and%2015%20girls%20have%20gone%20on%20from%20Go-Pro%20Academy%20in%20Dubai%20to%20either%20professional%20contracts%20abroad%20or%20scholarships%20in%20the%20United%20States.%20Here%20are%20two%20of%20the%20most%20prominent.%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EGeorgia%20Gibson%20(Newcastle%20United)%3C%2Fstrong%3E%0D%3Cbr%3EThe%20reason%20the%20academy%20in%20Dubai%20first%20set%20up%20a%20girls%E2%80%99%20programme%20was%20to%20help%20Gibson%20reach%20her%20potential.%20Now%20she%20plays%20professionally%20for%20Newcastle%20United%20in%20the%20UK.%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMackenzie%20Hunt%20(Everton)%3C%2Fstrong%3E%0D%3Cbr%3EAttended%20DESS%20in%20Dubai%2C%20before%20heading%20to%20the%20UK%20to%20join%20Everton%20full%20time%20as%20a%20teenager.%20He%20was%20on%20the%20bench%20for%20the%20first%20team%20as%20recently%20as%20their%20fixture%20against%20Brighton%20on%20February%2024.%0D%3C%2Fp%3E%0A
Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Ovasave%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20November%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Majd%20Abu%20Zant%20and%20Torkia%20Mahloul%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Abu%20Dhabi%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Healthtech%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%20Three%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-seed%3Cbr%3E%3Cstrong%3EInvestment%3A%3C%2Fstrong%3E%20%24400%2C000%3C%2Fp%3E%0A
THE SPECS
Engine: 1.5-litre
Transmission: 6-speed automatic
Power: 110 horsepower
Torque: 147Nm
Price: From Dh59,700
On sale: now
How to vote
Canadians living in the UAE can register to vote online and be added to the International Register of Electors.
They'll then be sent a special ballot voting kit by mail either to their address, the Consulate General of Canada to the UAE in Dubai or The Embassy of Canada in Abu Dhabi
Registered voters mark the ballot with their choice and must send it back by 6pm Eastern time on October 21 (2am next Friday)
UAE currency: the story behind the money in your pockets
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
-
-
-
-
-
-
-
-
-
Political flags or banners
-
Bikes, skateboards or scooters
More coverage from the Future Forum
Origin
Dan Brown
Doubleday
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
