Faster & easier ways to pay-off your home loan

Buying a home is more than just finding a house you like, moving in and living in it. It is a long a tedious process for many homebuyers who do not have enough cash to buy a home in one payment. Most homebuyer apply for home loans with a payment scheme that can take at least 5 years to more. Depending on the homebuyer financial status the home loan payment can be a long financial burden to carry. Check out these tips to help you pay off your loan easier and faster: 

Go for the right home loan payment term

One of the headaches in any kind of loan is the length you need to cover in order to fully settle your loan. There are two kind of payment schemes you might come across: long term loans or short term loans. The long term loans will allow you spread your payment for a longer period and for lesser mortgage every month. It does, however, means you have a higher payment total. You will be paying more than those who got a shorter payment term. On the other hand in short term loans, you need to pay higher monthly amortizations  but have a lower payment total overall. 

A short term loan allows you to save around 10-12% of the supposed payment because you don’t have to keep paying monthly interest you will find in a longer home loan. 

READ: The Can I use Maceda Law, if I stopped paying my Loan? article is helpful if you’re having trouble paying your home loan

Check bank home loan offers and promos

Make sure to do your research and compare what the banks are offering. Not all bank loans are the same. So always check what bank promos before you decide and jump in. Most cases some banks offer promos for potential homebuyers with lower home loan interests. These can be time-limited, so make sure you follow the banks on social media or call the bank to ask if they have an ongoing loan promo. This will not only assure you that the bank will help you in your home loan application but it will also save your thousands in the long run.

Consider making repayments

If you already bought a home and in the long process of paying off your home loan, making frequent repayment is a good strategy. Instead of paying your amortization every month, you can make fortnight repayments instead. You can divide you monthly amortization into two and pay it every two weeks. This will allow you to pay an extra one month worth or amortization each year without even realising it. There’s a total of 26 fortnights and there are only 12 months a year covering an extra month annually. 

Ofcourse you can increase the amount you pay every time you have extra to spare that month or if you have gotten a raise and prefer to divert extra funds to your home loan.

READ: A helpful article on What You Need to Know About Housing Loan Refinancing

Pay lumpsums whenever you can

Some homeowners do not know about this but you can actually make your amortization payments shorter and get interest savings. Lumpsums or big one-time payment can over a good percentage of your loan. It can either cover your monthly amortization in advance or it can pay off a significant portion of your principal amount loan. Lumpsums can be source from you 13th month pay, bonuses, inheritance, monetary gifts, or even savings. If you do not have anything to use the funds on, you can definitely use this for your home loan.

READ: Check out Can I use my company life insurance to pay for my housing loan? article if you plan to pay a lumpsum with your life insurance

Decrease your monthly expenses

There are things you need to sacrifice for the greater good – which is to having a home you can call yours. Being frugal is knowing your priorities and using that to your advantage with your finances. You can set aside money from deciding to take the train versus the taxi, skipping on expensive coffee from cafes, buying clothes you don’t really need, or upgrading a gadget when you really don’t have to. Doing this will allow you to save more money to either pay more than the required monthly mortgage or to save and raise it to a significant amount and make a big one time payment.

READ: Self-employed and don’t know what to do? Check this out How to Score a Housing Loan if You Are Self-employed or an Online Worker?