Owning your home sooner
Paying off your home sooner could mean you can gain wealth from it. Not only can you live in it, you are likely to get some capital appreciation over time. This means you may be able to borrow against this asset to finance future business or investment opportunities.
The best loan is the one you pay off the fastest and with the least amount of interest. Here’s how you do it:
Set a budget and stick to it
It may seem tedious but understanding what your living costs are and the amount you can spend will help you budget for the things you want to buy. It can also greatly help you to pay off your home loan sooner. There is a simple budget attached to this information pack to help you get on the way. I would be more than willing to assist you start this process.
Make your payment every fortnight
Your interest is calculated daily. By paying every fortnight you are not letting the interest accumulate for a full month before paying it. If you are paying half the monthly payment each fortnight then in effect you will pay the equivalent of 13 monthly payments which can save years off of the life of the loan.
Use your salary smartly
It may be in your interest to have your salary paid directly into your home loan account and redraw your living costs as and when you need them. Your principal and interest gets paid before anything else and your savings can actively reduce your home loan.
Lump sum payments when possible
Try and contribute tax returns, cash gifts, inheritances or anything else you can to your home loan. You’ll be surprised at the huge difference this can make.
Paying that little bit extra
Chances are your income will increase over the course of your home loan. When this happens allocate a percentage of your increase to your loan repayment. Again this will save you a fortune over time.
Carefully manage short term debt
The interest you pay on credit cards and store cards is much higher than the interest you pay on your home loan. If you have to use a credit card, look for one that gives you an interest free period and make sure you pay it in full every month.
Get rid of your expensive debt
If you do have debt accumulated in credit cards you should talk to us about how you can use the equity in your home to drastically reduce your interest costs.
Regularly review your loan with your Mortgage Consultant
As your circumstances change you should review your loan and ensure it still meets your needs. Feel free to make an appointment with me for a loan review anytime you require.
Please use this information as a guide only – it is not advice. You should seek professional advice when buying a property or taking out a loan and always refer to your loan contract for full terms and conditions.