Mortgage repayments are the biggest financial commitment that a common Australian makes in their lifetime. From monthly budget planning to mortgage interest payments, the dilemma that a mortgage owner faces when paying off the mortgage repayment is surreal- But it’s no more!
Here’s Ethica- Financial planner based on sunshine coast sharing some major tips to pay off your mortgage earlier than you think you could.
Major Tips to pay off mortgage faster
- Monthly Round-Up payments
Mostly mortgage repayments are calculated based on percentages that look something like $532.06 which is not calculated as well-rounded figures like $600.00.
So, when you do your monthly budgeting, round this figure as much as possible to make extra payments. This might seems like a small amount, but these extra contributions help you to make a good amount of principal payments and allow you to clear it much quicker.
2. Bi-Weekly Payments
Another big step that you take for paying off the mortgage quicker is by making bi-weekly payments instead of following regular monthly installments made in bulk. This allows you to follow the payment structure without affecting your monthly budget by paying half the payment every 2 weeks in a month.
3. Refinance Payments
Going for a shorter-term loan or refinance can be a great decision for getting rid of mortgage loans easier. But, this may not be the right option for everyone; still, a shorter-term loan with a very low interest helps some people to pay off their mortgages. And, it is best done if you consult a financial planner before deciding for refinancing and find whether this strategy works for your current financial situation.
4. The right use of unexpected Cash
In most financial planning, only the income stream is taken into consideration while the unexpected things such as cash gifts, seasonal bonuses, and winnings are not always included, as it is used for many other personal purposes. But by making a wise decision and choosing to put that to paying off mortgage repayments, you will be able to make faster repayments. Also, you might be able to save a significant amount on spending interest rates and reduce a few years off your mortgage.
Conclusion
The major means to pay off the mortgage is by following some effective financial planning and wealth management strategies. By taking such strategic moves, you can reduce the length of your loan term and get rid of spending overall interest bill for your mortgage. Also, you can maximize the equity of the mortgage rate by reducing your Loan to Value Ratio (LVR) which helps in paying off your mortgage within a shorter period. But anyway, talking to an experienced financial planner is the ideal way to know about managing your finances more effectively and relieve from the mortgage burden faster.
If you want to learn more about effective financial planning, feel free to contact us today. We provide a free 2-hour financial assessment session to talk about your financial situation and help you to make wiser financial choices.
