3 ways to pay off your mortgage faster

If you’re interested in climbing in to the property market, chances are you’re probably going to need a home loan.

The Observations on the value of mortgage broking report commissioned by the Mortgage and Financial Association of Australia made some interesting findings, including the fact that the home loan industry has shown growth for almost 100 straight quarters. Now that is impressive!

There is a lot of information for people on their first home buyer loan, but what about the subsequent years of financial commitment? Here are a few tips for achieving financial freedom faster.

Budget

You had to budget to save for your first home loan, and now that you’ve got it, you have to save to pay for the repayments! The positive side to this is that if you managed to save up for a deposit, you’ve probably already got an effective budgeting plan that you can use again.

Basically, study where your money is going and cut out all unnecessary spending. Money Smart suggests setting monthly saving goals, which reward you with money to do with whatever you like provided you achieve them.

Pay more

The old saying “time is money” fits a home loan like a glove. The longer you take to pay it, the more you will be paying to your lender so it is in your interest to get it paid off quicker!

An effective way of shortening your home loan is to talk to mortgage brokers and get the lowest rates possible, but make your repayments as if they were 3 or 4 points higher. Changes in interest wont affect you and your mortgage will diminish faster. Besides, it’ll be easy with your budgeting.

Schedule your payments

If you’re able to arrange your home loan repayments so that they coincide with your paycheck, it will make your life a lot easier. You will be able to feel more secure knowing that all the money that comes in on pay day is yours.

Shop around

Mortgage brokers can help  find the ideal rates for your situation, often at no cost. They’ll be able to answer all your tough questions like How much can I borrow? And what loan package should I go for? You’re most likely going to be in for the long haul, so you might as well make sure you’re getting the best deal.