Make your mortgage work for you

For many of us purchasing a property is the largest single investment that we will make in our lifetime, and our mortgage payments will form a significant monthly outgoing of funds for years to come. Because of this, it's crucial to spend time researching the range of mortgage products that are available.

Even when your mortgage is in place and you have moved into your dream home, there are many ways to identify savings opportunities by being smart with your payments and managing your mortgage effectively. By taking some simple steps, you really can bank thousands of dirhams over the life of your loan:

1. Plan in advance: Define your goals and objectives early on. How much of the capital will you repay and at what intervals? Consider how much your mortgage allows you to repay and what charges this involves. Think about key milestones throughout your life such as getting married and having children and how they will affect your ability to service your mortgage.

2. Explore the potential savings of changing your mortgage or mortgage provider: Moving to a different mortgage product or a different lender can lead to significant savings. Be sure to consider any charges associated with this such as early repayment fees, application fees, legal bills and valuation costs.

While switching your mortgage may seem like a daunting task, at Lloyds TSB Middle East our unique service means that we will be with you every step of the way to guide you through the process and make it as hassle free as possible.

3. Review your repayment levels: Think of prepayment as a type of investment. If you have a good amount of cash sitting in an account that is not earning a lot of interest, you could consider using that money to reduce your mortgage balance.

Always calculate the real cost of prepaying your mortgage. Many lenders will apply early repayment charges.

4. Consider consolidating your debt: If you have a number of loans that charge high interest, consider paying these off and increasing the size of your mortgage to create more manageable monthly payments.

5. Seek advice from your lender: If you're struggling to make ends meet, start by reviewing your personal finances to see where your money is going. If you think you'll miss a mortgage payment, get in touch with the lender quickly. They can offer you guidance and inform you of the options available.

Of course, it is important to choose the right mortgage in the first place.

When it comes to buying a home or refinancing your existing mortgage in Dubai, a Lloyds TSB Middle East Mortgage Co-ordinator will take care of the administration and your Relationship Manager will be ready to advise you on any aspect of your finances — including insurance and investments.

The writer is Head of Personal Banking for Lloyds TSB Middle East. Opinion expressed here is the writer's own and do not reflect the views of Gulf News.