4 of the Best Tools to Pay Your Mortgage Off Quicker!
I’ve found recently that many people don’t actually know what tools are available to them in regards to their mortgages. I was discussing offset facilities with my sister, who has had a mortgage for quite a few years and she didn’t even know what they were. I’ve also noticed at the financial institution where I work 75% of our loans have been brought to us by brokers. For those of you who don’t know what a broker is, a broker is a third party paid a commission by financial institutions to settle loans for the brokers clients. So what does this mean? Often I find that the broker sells the loan, but doesn’t explain the tools available at that financial institution to use with that loan.
In my experience these are the tool that will help you pay off your mortgage faster:
100% Offset Facilities – An offset facility is normally a bank account set up so that the balance of that account offsets the balance of the home loan and then therefore reduces the interest payable on the home loan without having to actually pay the money into the home loan. Another benefit of this is that the funds remain at call.
Fortnightly Repayments – Making fortnightly or weekly repayments instead of monthly repayments means that you will make an extra monthly payment every year, the benefit of this again is that you will be paying less interest and will of course pay your mortgage off sooner.
Small Extra Repayments – By paying and extra $100 per week on your mortgage you could cut your loan term in half. The best way to work out what yo can afford to pay extra into your mortgage is to draw up a budget, if there is nothing left over once you have budgeted, try to think of ways you could cut back your expenses. Are you a smoker? Do eat out at lunch everyday? By not doing either of these things you could potentially save $50-$100 per week.
Tax Refunds & Bonus Payment – Each year commit to contributing any tax refunds or work bonuses to your mortgage. This can often be a few thousand dollars and make a huge difference to the amount of interest paid.
The main thing to remember about paying off your mortgage faster is that you need to reduce the interest you pay, anything that you can do that will reduce the interest paid will get your mortgage paid off quicker.
By Chelle K.
Found on ezinearticles.com