Arnold
CibbuanoGreat ideas to reduce your mortgage ASAP
October 20th 2006 01:02
For most young to middle age people, having a mortgage is a fact of life. For some it is a burden they’ll carry for most of their lives. For most mortgage repayment systems, if you stick to the minimum repayment schedules the term of your loan is going to be between 25 to 30 years depending on how much you borrow and the agreed minimum repayments. The wonders of compound interest make paying off your loan quicker a simple way to reduce the total amount that you’ll be forking over to the lender over the period of your mortgage.
When you tally it up, even small contributions can make a significant impact. The key to making a sizable dent in the total repayment amount is to get in quickly and get in early. The faster you can start sacrificing additional payments to reduce your mortgage they better. These are some simple tips you can follow to reduce the burden of a mortgage in the long term.
1. Set a higher rate of interest for yourself.
This is a good way of conditioning yourself for a rough financial cycle. Assume a higher rate of interest and make it a habit to pay that amount in your regular repayments rather than opting for the lenders variable or fixed rate.
2. Increase the number of repayments.
With mortgages time is money. If increasing your minimum repayment is a too tough and your not too efficient with saving, look into occasionally making additional unscheduled repayments. If you get a bonus at work, come home from a holiday with a bit of extra holiday cash or find a bit of extra money in the bank account channel it towards your mortgage.
3. Carefully plan your spending and expenses.
Sure life shouldn’t be all work and no play but to reduce your mortgage and eventually make your life more comfortable in later life it can require taking some sacrifices earlier, biting the bullet and really taking a crack at the mortgage. Carefully consider any large expenses, cars, holidays furniture, boats, home entertainment systems etc. Do you really need the item and look to get the maximal discounts on these items as possible.
Small changes can also make an impact. Reducing the number of meals you eat out, looking at mobile phone plans, buying generic products, these are all small changes in habit that can effect the amount of money you have at the end of the year. Save as much as possible and at the end of the year, give yourself a portion as a reward and the rest to the mortgage.
Check back next week when I’ll look at some more mortgage cutting tips and tricks.
When you tally it up, even small contributions can make a significant impact. The key to making a sizable dent in the total repayment amount is to get in quickly and get in early. The faster you can start sacrificing additional payments to reduce your mortgage they better. These are some simple tips you can follow to reduce the burden of a mortgage in the long term.
1. Set a higher rate of interest for yourself.
This is a good way of conditioning yourself for a rough financial cycle. Assume a higher rate of interest and make it a habit to pay that amount in your regular repayments rather than opting for the lenders variable or fixed rate.
2. Increase the number of repayments.
With mortgages time is money. If increasing your minimum repayment is a too tough and your not too efficient with saving, look into occasionally making additional unscheduled repayments. If you get a bonus at work, come home from a holiday with a bit of extra holiday cash or find a bit of extra money in the bank account channel it towards your mortgage.
3. Carefully plan your spending and expenses.
Sure life shouldn’t be all work and no play but to reduce your mortgage and eventually make your life more comfortable in later life it can require taking some sacrifices earlier, biting the bullet and really taking a crack at the mortgage. Carefully consider any large expenses, cars, holidays furniture, boats, home entertainment systems etc. Do you really need the item and look to get the maximal discounts on these items as possible.
Small changes can also make an impact. Reducing the number of meals you eat out, looking at mobile phone plans, buying generic products, these are all small changes in habit that can effect the amount of money you have at the end of the year. Save as much as possible and at the end of the year, give yourself a portion as a reward and the rest to the mortgage.
Check back next week when I’ll look at some more mortgage cutting tips and tricks.
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