Home Loan Solutions

10 ways to reduce your home loan faster 7. Consolidate High Interest Loans You may have credit cards, personal loans that are at a higher interest rate. Consider consolidating these to a lower rate of interest. It is important here through, that you do not only pay the minimum required as you may extend your Loan term overall, therefore costing you more. For example if you consolidate these into your Home Loan, you do not want to be paying these over a 25 or 30 year term. It is important to determine the right repayment so this will save you money! This repayment will often be less than what you’re paying on the high interest facilities therefore improving your cash flow. 8. Reduce The Term Of Your Loan When taking out a home loan consider your loan term. Why take an original term of 30 years if you’re comfortable with a 20 or 25 year term? By taking a longer term you are only increasing the amount of interest you pay back. Alternatively take a 30 year loan term initially however set up your loan repayments based on a shorter long term. 9. Don’t Pay Interest OnCredit Cards We suggest that you pay off your credit card each month to save interest. Keep your limit to what you require and not what the Lender is prepared to offer. Some Lenders will set up an automatic sweep of your credit card if you prefer, this means that your card is paid each month from an account that you nominate. 10. Consider Buying An Investment Property As most of the repayments to an investment property can be covered (in many cases) by the tenant/rent and tax credits, it may be a good time for you to consider Investing in Property. If a property gained 7.25% growth each year, it will double in value in 10 years! This property could then be sold and a lump-sum payment could be put toward your Home Loan. You should seek professional advice when investing in property. 1. Increase The Frequency Of Your Payments By paying fortnightly or weekly, you can reduce your Loan Term. For example: on a $350,000 Home Loan with a 30 year term & an interest rate of 3.5%, repayments would be $1,571.00 per month. However, if you paid fortnightly, you would save over 4 years in repayments, which is over $31,000 interest! 2. Use An Off-Set Account (if beneficial) An Off-Set Account is simply a savings account linked to your Mortgage. For example: If you have a $350,000 Home Loan and $10,000 parked in an Off-Set account, interest is only calculated on a $340,000 balance, not $350,000. 3. Choose The Right Home Loan With so many products available, it is hard to know which really suits your needs. That’s where a finance broker can help. It’s all about choice. 4. Increase Regular Repayments On a Home loan of $350,000 with a 30 year term & an interest rate of 3.5%, repaying an extra $50 per fortnight would save you 2 years in repayments and $26,144 in interest. 5. Deposit Lump Sum Payments Use bonuses or tax refunds to reduce your loan faster by crediting these funds into your Home Loan Account. 6. Know What You’re Spending Are you on the right phone plan? Can you save on your car insurance? Your savings can be redirected to your Home Loan to reduce the overall interest charged. Exceptional service and great product knowledge. Alana - Coolbellup WA “