How To Pay Off Mortgage Faster

• If you have a home loan mortgage or even a personal loan consider paying off your mortgage in fortnightly installments instead of on a monthly basis. This common mortgage saving tip means that you will end up making 1 extra months payment per year without hardly noticing the difference and therefore save money on mortgage interest repayments over the life of the loan.
• When the interest rate on home mortgage loans goes down you should make sure that you keep your fortnightly repayments the same. You won't notice any difference in your expenses but you will save lots of money on interest repayments and pay off the mortgage faster.
• Another good idea on how to pay off mortgage loans faster is to put at least half of any pay rise that you receive directly towards extra home loan repayments. Alternatively if you don't have a home loan then you should put that money directly into your savings account.
• Most banks and mortgage lenders have home loans available that are connected to a 100% mortgage offset account. This means that any money that you have in this mortgage offset account reduces the amount of interest that the bank charges you on your loans, so that you pay off more principal and less interest every month. The money in this account is still readily accessible by you at any time and if you set up your personal finances in this way then you can save $1000's in interest repayments and pay off your mortgage faster.
• Mortgage refinancing is necessary from time to time and there are a number of reasons why you would want to to refinance your home loan. These include getting a cheaper mortgage deal with better facilities, using equity to purchase another property and consolidating your debts into one lower interest rate. Each of these situations can be a little complicated so it is always best to get professional mortgage advice from at least 2 different mortgage providers or brokers, as they can demonstate how this can help you to pay off your mortgage faster.
• When you are refinancing your mortgage you should always be aware if there are any break fees or delayed establishment fees for closing your original loan. Also do your research thoroughly and establish that you are switching to the best mortgage for your particular situation and do not just take the word of a mortgage lender or broker. Finally, if you are refinancing to get access to the equity in your home then be very careful what you use this equity for. Spending it on personal items or depreciating assets such as a holiday, home theatre system or new car will mean that it will cost you a lot more money in interest repayments over the life of the loan than if you just saved up and paid for that item with cash.
• If you lose your job or are having troubles meeting you monthly mortgage repayments then talk to the bank as soon as possible. Do not ignore it, let it get worse or think that the bank might not notice it. As bad a wrap as the banks get they do not want to foreclose on your house if they can help it because it is a risk to them to have to try and sell it to recover the mortgage costs. Nearly all banks have in place flexible repayment options that can help you if you lose you job or fall behind on your repayments, and the earlier that you put these in place the better off you will be.
• Sometimes it seems like a very hard call on when you should fix your interest rate and when you should leave it as a variable interest rate. Banks have always priced in the future direction of interest rates into fixed rate mortgages so in this situation you should not worry so much about timing but more about your own financial situation. If you want the security of knowing how much interest you are paying each month then choose a fixed mortgage for an appropriate length of time (ie: 1, 2, 3 or 5 years). Just be aware that fixed mortgages have the drawback of less facilities such as making extra repayments, offset accounts, redraw facilities and if you sell the property or want to get out of the loan then you may have to pay significant break costs.
• In some situations a better alternative to fixed rate mortgages is to fix a proportion of the loan, say 50%, and keep the other amount as a variable home loan. The advantage of doing this is that you can still have the extra facilities that can save you money like a 100% offset account, but you can also have the security that if interest rates do go up then only a proportion of your monthly mortgage repayments will increase.
• Interest only mortgage loans where you only ever pay off the interest every month and no principal are generally only useful when the loan is tax deductible, like an investment property. You may ask, why would you want to do this? Firstly, interest only repayments are more likely to be completely covered by the rental payments from the property or at least reduces the amount that you have to pay every month, especially for the first few years of the loan. Secondly, although the size of the loan does not ever go down over time it will seem relatively smaller because the value of the property will go up year after year. And thirdly, the money saved by not making principal repayments can be more effectively directed into your personal savings for investing in something else. Good mortgage brokers should be able to give you a detailed illustration on how a mortgage works for your own personal situation.
• When you are looking for a home mortgage loan there are advantages in going to a mortgage broker instead of to individual mortgage lenders. The main advantage is that the mortgage broker can provide you with a mortgage comparison for many lenders in one go, as well as providing you with mortgage information about the different facilities and fees for each loan. Their job is to save you a lot of time and effort, but remember the ultimate choice is yours so make sure that you choose the home loan that is right for your needs.
• The most important thing to look for in a mortgage broker is the list of lenders that they are able to do their mortgage comparison on. You want to make sure that they are comparing as many of the different home loans on the market for you in order to find the most appropriate and best mortgage for you. Also find out what commission they get paid and are they paid the same from each mortgage lender. You do not want them to be pushing you towards a home loan with a particular lender just because they get paid the biggest commission from them.