Smooth your cash flow for mortgage payments

Do you have “lumpy” cash flow over the course of the year but still have to make your mortgage payments every month? Let’s look at two examples, firstly inconsistent monthly income and after that a more extreme example like losing your job.

Inconsistent Monthly Income
For example, you may be running your own business and only get paid when a contract completes. Maybe you operate on sales commission or end of year bonus? You know you will get paid later, but you don’t have the full cash now.

The Float My Mortgage method can help smooth cash flow with your mortgage payments by paying your mortgage payments now today with other people’s money. You then pay it back in over 1 year’s time. The cash is still in your bank account ready to be used a temporary expense’s fund until you get paid in full later in the year. This can help you bridge the gap while you wait to get paid.

You still have to pay it back, but you have the time to get paid and sort out your expenses. You already know how to work this way if you are used to getting paid per contract or with a year end bonus.

The Float My Mortgage method will show you have to “float” these payments out for more than 1 year for less than 2% total cost. This smooths your cash flow and balances your finances.

Job Loss
Let’s take a job loss scenario. You happily have a job and get the “loan” for about 2% for 12 months to 18months to pay your mortgage (the method will show you exactly how to get the “loan”). You only need to make the minimum “loan” payments (say $50 a month) which you should definitely do *automatically* (have to be organised not to miss a payment). You have a extra $1000 in the bank account, which earns you 1% for a 18months (not much but that’s the current savings rates). Then you sadly lose your job. At that point you have the cashflow (from th bank account) to pay the first month mortgage payment, after your last paycheck stops. If you did this a few times, you may have enough time to find another job (e.g. 3months to 6months). Admittedly you may need to compliment this with your previously saved emergency money fund (to be conservative) but you would have a 1 year to recover. However it can be a good way to “float” mortgage out for a year or so (if you have “lumpy” cas flow). Obviously if you miss payments and dont manage it responsibly it could make your situation worse, but like all tools –it’s how you use it. It could definitely be used to “bridge” between jobs. Smoothing cash flow is just on use of floating your mortgage (far and away the best one is paying down extra principal a year or more in advance, that can really accelerate the mortgage, but here we talking about using it as a “bridge” between jobs). Like any credit management –this only damages your credit rating if you it irresponsibly. The Float My Mortgage method will explain how to do this responsibility avoid significant credit score impact.

Summary
The Float My Mortgage can help you manage you mortgage payments when you need it most. However you must be careful to always make the minimum payments or you will make a bad situation worse. Like all tools it is how you use it that determines your success.