Own Your Home Sooner – Paying off Your Mortgage Faster
Repaying Your Mortgage Faster
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Can you reduce your mortgage faster so that you can be free of debt sooner and really own your own home? The answer is Yes! Here are some ways that might enable you to do that:
- Getting a good deal on interest rates
- Extra repayments
- Extra features and options only at the right price
- Refinance if a better deal comes along
Lower interest rates reduce mortgage repayments
A low interest rate, while not everything, is one of the more important factors that you should look for in getting a good home loan. Be sure to exercise diligence in doing your homework because loans with lowest rates of interest may not be apparent while standard home loans may not be the cheapest.
Whilst you shop around for the best home loan available, beware of appealing loans that sounds too good to be true. Home Loans with introductory or honeymoon rates tend to be short-lived and you might end up with a more expensive overall loan.
Extra repayments can reduce your mortgage repayments
Having debt should instil financial discipline in you and extra money freed up from other sources should go into repaying your debt. Especially during the early years of your mortgage, extra payments can reduce your interest payments substantially so that the life of your mortgage shortens.
Be sure that your loan allows extra payments to be made and if fees will be incurred for them. Some loans carry penalty charges for ending them early, especially fixed rates loans which might not allow for extra repayments to be made.
Mortgage Loan Features and Repayment Options
Some common housing loans features include
- A Redraw Facility – allowing extra payments and withdrawal of the extra payments if you need them
- A Mortgage Offset facility– allowing interest savings on the loan when the mortgage is linked to a savings account, which your income and expenses are transacted through. So money in the account will offset against your mortgage, thus reducing your interest payments
- A Line of Credit – a credit facility secured against your home so that you have flexibility in repaying what you have borrowed, which is better suited to investors and businesses.
You should know that nothing comes free, of course. Such flexibility comes at a cost – higher interest rates. Therefore, you need to carefully consider if they are really necessary. Paying even an extra 0.5% in regular interest payments may cost you far more than any savings these features might offer.
Refinance your mortgage to lower repayments
Market and economic conditions change over the years, so a better deal may be possible today compared to when you first took out the home loan. However, if you do decide to refinance the loan, there will be additional costs such as termination fees for exiting your current loan and fees and charges for the new loan, associated with refinancing.
eChoice
Mortgage brokers such eChoice will be able to offer expert advice and find you the right mortgage repayment loan. Vist eChoice Click Here to keep in touch with developments in the home buying and home lending markets.
