6 steps to halving your mortgage
Although it can be tempting to use your home mortgage as a revolving line of credit, any qualified mortgage broker would tell you that, in order to pay off your mortgage as quickly and cheaply as possible, there are a few steps you can take! If you follow these six tried and tested mortgage broker tips, you can potentially cut your mortgage payment in half!
- Find the right loan in the first place! : Don’t just jump on the first approval you get. Shopping around with the help of a qualified mortgage broker can save you potentially thousands of dollars. There are many types of interest rates (standard, basic, fixed, etc) and offers and you should compare and contrast them before making your decision.
- Change your repayment frequency! : Instead of monthly payments, consider making them every 3 weeks. Interest compounds daily so you’re not doing yourself any favors making only minimum payments on a monthly basis. Many mortgage brokers suggest this as the #1 thing you can easily do to pay your loan off much faster.
- Pay more and pay early! : Paying above and beyond the face value of your mortgage payment when you’re able allows you to pay directly to your principal. It can be helpful to sit down and develop a budget. You may be able to find cash that you’re wasting on other things and put that towards your mortgage, reducing the life of your loan!
- Make the most out of your redraw and offset accounts! : Redraw accounts allow you to make additional payments at your own discretion but to “redraw” them back out if you need the cash and offset accounts “offsets” outstanding principal. Use them both as they’re intended to help you out when needed but still pay down your loan! Discuss options with your mortgage broker can help you decide how best to use these incredibly helpful options!
- Resist “generous” offers! : Some loans look great for the initial offer but significantly increase the life and cost of your loan after that initial, “generous” offer expires. Make sure you read the entire wording of your offer through with your mortgage broker before accepting or signing anything. Sometimes these are called “honeymoon offers,” so if something sounds too good to be true, it might actually be!
- Refinance for a better deal, if possible! : Interest rates are constantly changing! One of the best ways to make sure you getting the best deal is to stay in contact with your mortgage broker. You might even be able to reduce your rate by 1%. You may also be able to pay your fees up front instead of having them added to your loan, costing you at first but reducing the over-all cost of your mortgage in the long run.
Although the above are all excellent tips, the best way to potentially halve your mortgage is with the help of a qualified, knowledgeable mortgage broker: http://www.mortgagebroker247.com.au/personalloans/