- Posted 30 Mar
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Australian Credit and Finance is all for saving you money. We wanted to share some tips with you that will shave years off your mortgage and save your thousands. Besides who doesn’t want more money to spend!?
Tip #1 Pay more than the minimum payment each month.
This is a tried and true method of cutting your mortgage quickly. By paying only a few dollars more off your loan you can cut by years and thousands of dollars interest. Pay what you can afford, it might change each month but try to make extra repayments over and above the minimum. You’ll end up cutting sizable sums out of your principal meaning less interest to pay.
Tip #2 Pay more frequently
You’ll be amazed at the difference in paying off your loan more frequently. Repayments are usually quoted in dollars per month, try paying fortnightly or even better monthly. For example there are twenty six fortnights in a year as opposed to 12 months, that means you are paying an extra fortnight off per year. Paying weekly will also improve your situation just that little bit further. You actually won’t pay off any more payments, but more you’ll gain the benefit from lower interest payments.
Tip #3 Make a larger deposit
Having more of a deposit will mean you need to borrow less. This is especially the case where your deposit is less than 20%, which means lender’s mortgage insurance (LMI). The more downpayment you have the less you’ll need to borrow. If you do need LMI you can capitalise that to you loan which means that insurance becomes quite expensive over the long term.
Tip #4 Compare the products
Not all mortgage products are the same. Make sure that the one with the lowest interest rate does have the highest fees. Try to work out what the comparison rate might be of the financial product you are looking to take making. If you can compare the actual costs of the products side by side you’ll be a lot better off.
Tip #5 Keep it Simple
If for example you are a first home buyer you simply don’t need all the bells and whistles of some mortgages. Cash back, redraw, offset are all fancy terms which simply might not be useful to you at your initial stages of borrowing where typically you have little spare equity and simply need to pay off a home loan. Keep it simple and focus on the basic principle, owning your home as soon as you can.
Tip #6 Talk to ACF
Australian Credit and Finance are specialists in Home Loans and we have relationships with over 20 lenders and know how to get the best deal from any lender which will save you big bucks! The best part of all is our service is completely free and unbiased. So call us!
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