Speed up your loan payments and save $$$
Sometimes the tectonic weight of a home loan exerts nearly enough pressure to create diamonds from worries. And debt moving south at a glacial pace, has you questioning the home buying journey. Whether committed for 25 years or five, no-one loves their home loan. Hurry the break-up and, look after your wallet! Here are five tips:
Don’t always pick the lowest rate
Read the fine print! Interest rates are important but also, just part of the story. Has the lender been conveniently unclear about costs? Application fees. Monthly fees. Annual services fees. Establishment fees. Legal fees. Redraw fees… Hmm, hiding like bed bugs in a mattress! Cheaper loans can require higher minimum deposits or restrict the properties you consider. And, beware the lure of honeymoon or introductory rates—when short-lived savings disappear, nightmarish payments could haunt you. So, get in touch and leave it with me! A good mortgage adviser deals with different lenders daily and will find the right one for your situation.
Wonderful, wonderful, refinancing…
People’s situations change, and home loans can too. There’s lots of reasons to refinance. Maybe you landed a better paying job or you're sick of paying for unused loan features. Renegotiate your current rate/ conditions/ features/ terms with your lender, or move on for a better deal. Done well, payments will shrink and, you’ll own your property quicker. Change is supposed to be as good a holiday... Refinancing might help you afford one!
Save buckets with extra repayments
Most mortgages are 15—25 years long. Repayments above what’s required reduce the principal owing, which trims both mortgage length and interest paid. It’s simple maths! If you can, incrementally increase payments by 15% per month. Or, take the lump sum approach… Received an inheritance? Work bonus owing? Why not pour it all onto the home loan? Every drop helps!
Look beyond the big banks!
Good things come in small packages… Cherish the little things… What I’m trying to say, is that the big four banks aren’t the only ones offering home loans! Smaller lenders typically compete harder for your business and provide a more personalised service, which could include options like:
· Longer loan terms – more time to pay!
· Smaller starting deposits
· Lower application and ongoing fees
· Fixed rates with 100% offset accounts
An offset account contains your savings and is linked to your home loan. Interest is calculated after the amount in your offset account is subtracted from the principal. So, if you owe $650,000 on your home loan but have $50,000 in the offset account, you pay interest on $600,000. Brilliant, hey?
I’d love to help you with any of the things I’ve written about!
So, feel free to give me a call!