Who wouldn’t want a faster mortgage repayment? Home loans are usually payable in 20, 30 years or more. Even if you pay for your own house, mortgage repayments take longer depending on the value of the property. 2016 is the best time to speed things up and make more payments even in smaller amounts. How is this possible? Some will find it hard at first especially if they receive the same amount of salary in a month. It is quite difficult to make advance payments or pull out extra cash for it. If you have other sources of income this can be possible. Mortgage repayment should be the first in your priority list. One must realize that the sooner they finish paying their home loan, they can save from interest rates and they can also invest in other assets.
Speed Up Your Mortgage Repayment
How will you be able to do this? Here’s a quick guide on how to speed up your mortgage repayment:
- Pay more often – Make smaller payments. Cut your monthly payment in two or every two weeks.
- Pay extra – Extra payments even in small amounts or round it off wherever possible. It’s small but it still counts.
- Mortgage offset account – It works effectively if you have sufficient money in this type of account. It can save you thousands of dollars and cut years off your mortgage repayment. The amount of money in this account is offset from your home loan balance. As you build more savings, the better it gets because it has no balance limit. The interest earned can also be used to offset mortgage interest. It also speeds up your mortgage repayment because it cuts down your home loan term.
- Do not decrease repayments – Even if interest rates fall, keep the monthly mortgage repayment the same for a faster progress on your home loan.
- Talk to a broker – If in case your situation changed and you are stressing a lot about your loan, speak with your broker. He/She can negotiate for you to match your needs.
Speeding up your mortgage repayment is beneficial for it provides financial relief: knowing that your home loan term becomes shorter or the interest rate is much lower. If you have incentives, bonus or other extra cash then might as well use it to pay your mortgage. Whenever there’s an opportunity to pay, go for it. Remember that the more payments you make the faster you can finish your loan.