Here we have sets out surefire, stress-saving ways to reduce
the financial impact of paying off a mortgage.
Here are the four simple steps that will see you home-loan-free years sooner:
1. Understand how your mortgages work
The important element to understand about home loans is that interest is
calculated on the daily rest and charged to the loan account monthly in
arrears. Take advantage of this fact. If you can reduce the daily balance,
even by just a few dollars, you will save in the long run on both interest
paid and the tenure of your loan.
2. You set the repayments
Lenders may call all the shots when it comes to setting your home loan
repayments, but you don’t have to stick to them. Plan your repayment as much
as you can afford, inform the lenders about your extra prepayment, else they
will assume it as advance payment and save no interest from you mortgage.
3. Pick the right home loan
You can employ all the mortgage-reducing strategies in the world, but if you
don’t have the right home loan you could find yourself stuck with a few
extra years and extra interest. The cheapest home loan may not necessarily
be the best home loan, but it is a good starting point.
4. Apply the basic principles
The final step to paying off your home loan sooner is to apply some
mortgage-reducing principles. Chances are you’ve already worked out one or
more of these tips, but it never hurts to pick up another strategy. For
example, you may realized that fortnightly payments are better than monthly,
but are you better off paying weekly rather than fortnightly?
With these 4 simple steps take
place and stick to them, you will save up to few years of your home loan
servicing period and interest paid as well.