How to pay off a home loan early
Families and individuals who are applying or servicing a home loan are always confronted with many questions such as what would happen if they failed to pay the mortgage every month and how best can the loan repayment period be shortened. There are basic options which one can consider to assist in paying off the bond early.
- Try to pay your home loan bi-weekly, it’s a detail which sounds insignificant but it goes a long way in this process.
- If you can afford it, make an additional bond installment every month.This goes to the principle of the bond amount, not towards interest.
- Refinancing is an option which can be considered. There are hundreds of companies out there that will be more than happy to assist with this. This can offer you a better interest rate which would mean a lower installment. The key is to maintain the current installment.
- Lump sum payments should be considered. This is done by paying any additional funds you are getting, such as salary bonus into your loan. It knocks off the capital.
- You can also shorten your loan term to a 15 year term, instead of 30. Yes you will have higher installments but you will be bond free in half the time.
The above tips should prove very valuable and answer questions which bother individuals and families and certainly help in saving money.
