Pay off your mortgage quicker!
I dream of the day we can make our final mortgage payment and see the back of the biggest financial burden of our life. I’ve been asked to share some tips for paying off your mortgage quicker, so lets have a look.
This post is in association with a Forex trading firm called Knowledge to Action and I must admit that until they asked me to help spread the word about Forex trading I knew very little about it. Still don’t really but I can say that it does look like an easy way to start paying a bit more off our mortgage, so i’ll be looking closer.
Like a lot of you our mortgage is the biggest debt we will ever have. It often seems as though we’ll never get out from under it, and many of us mortgage holders never really do so perhaps it’s time we took a little more control. Here’s some info about how the many investment advisors consider our home loan to be ‘good debt’ – it’s debt secured against an asset which has a high value (greater than the debt it is securing). By ‘bad debt’ such as credit card debt is not secured against a high value asset, regardless of how much you spent on that latest pair of boots. The reality for most people is that the debt, good or bad, still has to be serviced. With debt, it can often seem like you work for the bank, not for yourself and your family.
Here are 3 ways to pay off your mortgage sooner, so you can get your money doing more for you than just keeping up with the interest payments on your home loan. For more great strategies around managing your mortgage, browse a reputable finance training platform such as https://www.knowledgetoaction.com.au/, or click here.
1 – All In The Pot
Never miss an opportunity to put a little extra money into your mortgage. Throw in any extra cash you can – whether it’s your generous annual bonus or the handful of cash you generated from the weekend garage sale – as it all helps. Every dollar you put into your mortgage reduces the amount you owe, decreasing the interest repayment you need to make. For an alternative perspective, consider that every time you chose not to invest in your mortgage, you’re actually choosing to carry the interest for longer. Tell yourself “I’m saving $X plus interest” every time you pay a little more into your mortgage. Over time, the results can be quite exciting.
2 – Make Hay While Rates Are Low
Do everything you can to make the most of low interest rates. Sell all your old stuff, cut expenses to the bone for a few months, and put everything you can into your mortgage. It will get you the biggest benefit from the lower rate period. This will help you decrease the amount you owe more quickly, and will in turn reduce the interest you pay in a compounding effect. You could knock years off your loan in the process.
3 – Pay Fortnightly
Did you know there are more fortnights in the year than months? That may sound odd, but it works out that way when financial institutions use their formulas to calculate the number of days and weeks in a year when they set payment dates. If you pay your loan fortnightly or weekly instead of monthly, you’ll find yourself making at least one extra repayment a year. Over the life of a 25 or 30 year loan, this one extra payment per year could reduce the loan term by several years – sometimes even by as much as a decade.
There are a range of strategies for reducing your mortgage faster. Implement a few of these ideas and see how they make a big difference to the length of your home loan. You’ll be working for yourself, not the bank or credit union, a whole lot sooner.
Here’s a short video from the guys about what you can potentially earn…
I’m all for paying off our’s sooner so I can start looking at finance on one of these!
Cheers for reading and i’m off to have a closer look at this Forex trading.