The thought of a thirty year mortgage is daunting for most people, no matter what your annual income is. However, it doesn’t need to be all doom and gloom. The following four steps could put in you good stead to pay off your mortgage before the thirty years is up.
1. Take advantage of low interest rates
When interest rates take a dive, take advantage of the low rates by paying more into your mortgage. This could be a lump sum from your tax return or extra monthly payments. This will help you knock dollar signs off your principal faster and bypass some of the interest you are paying.
2. Save where you can
Try to save a little here and there. Say no to the morning coffee, knock back an invite to the pub for Friday lunch or bring in your lunch to work every day instead of buying it. If you put these small savings into your mortgage account you will be surprised how quickly the savings can add up. For example, a $4 coffee five days a week for the entire year can be a sum of $1,040 off your mortgage.
3. Shop around for a better mortgage
Don’t let your mortgage become stale. Make sure you shop around for a better loan that suits your needs and that can help you pay off your mortgage sooner, even if it means swapping providers.
Note: Be careful that you don’t break the terms and conditions of your existing loan though. They can often have hefty penalties.
4. Pay your mortgage more often
Making repayments more often can help you save money in interest payments and can help you pay off your mortgage sooner. Instead of paying monthly, try making repayments fortnightly to reduce your overall loan interest.
Be sure to check with your bank or your home loan specialist for more information on how you can become mortgage free sooner!
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Please note that it is the reader’s responsibility to seek financial advice from a qualified finance specialist. This information is compiled from information freely found on the internet.