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Updated by April Rose Casiple Semogan on Dec 04, 2020
Headline for Major Tips on Getting Rid of Your Home Loan ASAP
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Major Tips on Getting Rid of Your Home Loan ASAP

Living is such a wild concept. Sometimes, it seems like a game of luck where you roll your dice and hope for the best. Some people are lucky to be living with an adequate amount of cash and wealth to support them their whole life. Unfortunately, some people are not as fortunate in that aspect. Some people need to work multiple jobs to make ends meet, while others cannot even afford to save up for the future.

Regardless of what your financial standing is, there will always be a moment in your life when you need to admit that you need help. One good example is when you are buying a house. Even celebrities opt to get a mortgage for their house, so that says a lot. A home loan is a long-term commitment that you cannot get rid of for a long time.

How to Choose the Best Mortgage - NerdWallet

It would help if you started from the roots. Even if you have an effective plan on how to pay your home loan faster, it would not be fast enough if you are working with the wrong loan. Make sure that you consider every aspect of your needs and the loan's features before you make a decision. It really pays to shop around.

Do not go for interest-only repayments.

This is one of those things that are beautifully packaged but comes with a hefty price. This kind of setup allows you to have lower monthly bills, but this kind of repayment does not really put any scratches into the loan principal. So instead of choosing an interest-only repayment, get a principal and interest loan so you can start repaying the principal immediately.

Pay in advance or pay higher than you are expected to.

Check if your loan arrangement has a pre-payment penalty, if it doesn't-- go ahead and pay in advance or pay higher than you are supposed to. This will help reduce your loan principal.

Check if you can open a 100% offset account.

An offset loan means that your income goes into your mortgage account. This separate account can help you pay for other expenses on top of your mortgage repayments.

Be financially responsible.

This may mean that you need to give up certain aspects of your life. It would help if you were more practical regarding your decisions in your daily life. This starts with little things like packing your lunch instead of buying your meals outside. This can also mean switching to cheaper brands of clothing or products. This does not only help you repay your loans, it also helps improve your spending habits.

Change lenders when the opportunity arises.

Did you know that lenders change their offers every once in a while? As you know, different lenders offer different kinds of loans and features. If you feel like your current loan is not the best kind for your situation anymore, feel free to shop around for a new lender to switch to.

Start investing.

Investments are risky, but they have the potential to give you a significant earning that will eventually help you pay off your loan. You should definitely consult with a professional first before tinkering with investments, shares and stocks.

Maximise the use of your equity.

Your home has equity that you can use to your advantage. Equity is the difference between your home's value and the amount of your home loan you have left to repay. You can find some lenders who will let you access some of this equity. Instead of applying for a new personal loan, you can use this amount for making a big purchase.

Work hard and be vigilant!

As mentioned previously, lenders change their offers every once in a while. Do not get too comfortable with your current mortgage. It is good if you are able to pay what the lenders tell you to pay. However, if you look out for the right timing, you can use your mortgage and take advantage of a collection of discounts that allow you to repay your home loan faster.

Consider small lenders too.

It makes sense for you to consider big names right of the bat. This is because big names sound more secure and established. You would think that they are less likely to encounter financial difficulties. However, do not let this fact discourage you from considering small lenders. If you think about it, smaller lenders can manage their business better due to their size. Plus, they can offer you lower interest rates than the big banks.