Typically, property investors not only have investment loans but also a
home loan which is not tax-deductible, so they’re keen to pay this off as soon
as they can.
This is not necessarily the best strategy – I feel using surplus funds
to buy another property is better "bang for bucks” that paying off your home
THERE IS A NUMBER OF WAYS YOU COULD PAY OFF YOUR
HOME LOAN SOONER:
1. Pay more than the minimum repayment
This is what many Australians did over the last few years as interest
rates fell, they didn’t cut their repayments and got ahead on their mortgage
2. Make extra repayments
Either make an extra repayment or two when you’ve got some spare cash or
better still make fortnightly repayments rather monthly.
You see…there are 26 fortnights in a year, so you will essentially pay
for 13 months instead of 12 months with monthly repayments.
3. Consider an offset or redraw account
Offset accounts or redraw facilities are features of certain home loan
that allows you to use any extra income or savings to reduce the balance of your
loan, thereby reducing your interest repayments.
4. Choose your loan carefully
There are so many loans with a myriad of features, and while interest
rates are important, they’re not near the top of my list when I look for a
I look for flexibility, ease of making extra repayments and the ability
to redraw funds if I need to.
That’s why I suggest using a proficient finance broker to cut through
the maze of loans for you.
5. Don’t be scared to switch banks
It’s a very competitive business environment out there and banks are
always looking to get new clients.
At any one time, some are more aggressive than others for new business,
coming up with new loan products or more attractive deals.
You can switch with the same lender or change to a new lender
That’s where your broker will advise you.
And don’t be scared to move away from the big 4 banks. It doesn’t really
matter what colour logo is on your bank statements.
You’ll possibly find some of the smaller lenders will be more aggressive
for your business.
If you are looking to get a lower interest rate or just see what is available, We are here to help and is 100% free to find out
Just email firstname.lastname@example.org and I will organise someone to give you a call to chat
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Tuesday, 11 August 2020