How to Reduce the Effort Rate on Home Loans and Improve Financial Health

When your effort rate is substantially high, it means that a large part of your household income is committed to paying off debts, including housing loans. This can compromise your financial capacity and make it more difficult to get approved for a new loan. The good news is that there are several ways to reduce the effort rate of your home loan, to improve your financial health. Here are some practical tips for achieving this goal:

1. Review your total income
   The effort rate is not just based on your salary. Other incomes, such as disability or widow’s pensions, family allowances and even income from other jobs (as long as it is properly deducted) also come into the calculation. Consider all your income when analyzing your effort rate.
2. Renegotiate your credit
   If your effort rate is too high, one of the solutions is to renegotiate your loan. By extending the payment period or obtaining more favorable conditions, such as a lower interest rate, you can reduce your monthly payment and relieve financial pressure.
3. Credit transfer
   If you can’t renegotiate with the institution where you have the credit, consider transferring your loan to another entity that offers better conditions. Transferring your loan can result in a lower interest rate and more advantageous conditions, which will contribute to a more affordable monthly payment.
4. Credit consolidation
   If you have several loans, credit consolidation can be an excellent option. By combining all your debts into a single loan, you can simplify your financial management, reduce the interest rate and extend the payment period. This results in a single monthly payment, which makes it easier to organize the family budget and reduces your effort rate.
5. Increase the initial entry
   A larger down payment on a home loan reduces the amount to be financed, thus reducing the monthly payment. Whenever possible, save as much as you can before applying for the loan so that you can get a larger down payment and lower your monthly payments.
6. Repay credit early
   If you have extra income, such as a bonus or a windfall, consider repaying part of your loan early. This strategy can reduce the amount you owe, resulting in lower installments.
7. Adjust the choice of interest rate
   If you opt for a home loan with a variable interest rate, be aware of market fluctuations. Fixed rates offer more stability, but in some cases variable rates can be advantageous during periods of low interest rates. Evaluate your financial situation and market trends to make the most appropriate choice.
8. Review your insurance
   The insurance associated with home loans can be a significant part of the monthly payment. Compare the conditions of various insurers and choose the option that offers the best balance between cost and coverage.

Reducing your effort rate is essential not only to ensure better credit approval, but also to maintain your financial health. Evaluate your rate on our simulator.

Read also: What are the advantages of a credit intermediary?

DS Intermediários de Crédito is available to help you find the most advantageous solution for your case. Talk to us and find out how we can help you achieve your goal of home ownership with greater security and peace of mind.