If you have a good mortgage broker, they will have made it clear that the lower the interest rate you get on your mortgage, the better for you. Economic circumstances do change, of course, and when interest rates fall it’s time to re-look at your mortgage and see if you can shred it some more. Surprisingly, that doesn’t always been figuring out how to pay less, it’s about paying the least possible for your property overall. Here’s’ our top tricks.
Don’t drop your re-payments.
Keep paying what you were paying, even when interest rates fall. After all, you’ve managed it so far, and the result will slash the amount of capital you have due as well as build you a buffer for the future. You also don’t get out the habit of paying the larger amount, and won’t have a nasty shock if rates go up.
Split your payment.
Most of us pay mortgages monthly, but the top mortgage brokers in Melbourne advise to look at splitting the payment in half and paying bi-weekly instead. It doesn’t affect your cash flow but effectively gives you an extra payment per year, slashing your interest on your loan over time.
Top up your mortgage if you can.
Mortgage brokers recommend tossing any spare cash you can muster into the mortgage whenever you can. Your mortgage interest rate is calculated daily, so it creates an immediate drop in the amount you will be repaying. This is only if you have a mortgage that allows for it of course. Don’t earn extra fees to try this stratergy.
Pay your costs upfront [if you can]
Not every home owner can do this, of course, but mortgage brokers caution that you should consider paying the loan establishment costs, and your structural insurance, upfront if you can. This means they aren’t creating interest for you over 20 years.
Pay the first month upfront.
Perhaps easier to do then pay all originating costs, some mortgage brokers suggest you pay the first month the day you move in, not the end of that month. It effectively puts you a month ahead on payments.
Offset your loan.
If you have the right mortgage, mortgage brokers in Melbourne suggest channelling your salary and savings into the mortgage account to drop the daily interest rate.
Pay in lump sums.
If you receive regular lump sums, you can look at adding these to your mortgage if you can do so without extensive costs, even if it only parks there for a few months.
Shorter loan terms work, say mortgage brokers.
Easier said than done, but mortgage brokers caution that if you pay off your loan over a shorter time, you will save considerable amounts of cash. Subject to you being able to repay the higher loan costs this would result in, it can be an effective saving strategy for your mortgage.
For more useful tips from mortgage brokers about how to maximise your loan and minimise your interests, pop through to Mortgagebroker247.com.au.
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