Home Loan Today - Gone Tomorrow

You have finally bought a house of your own. For so many years it seemed to be a dream always a little out of reach. What happens next? You don't need to be chained to your home loan for 25 or 30 years. Here are some helpful tips to help you pay off your mortgage early and achieve "true home ownership."

Avoid honeymoon deals

Many lenders use introductory or honeymoon rates as marketing tools to attract new borrowers. Initially, you are offered a cheap interest rate on your loan so that you can enter, but once the honeymoon period ends, the lender will change it to a higher variable interest rate.

To understand the true interest rate you end up paying with a honeymoon product, look at the comparison rate advertised on that loan. Invariably, you pay less today but more in the long run.

Pay more to get ahead

It is a very simple concept to understand: the more you pay your mortgage each month, the faster your loan will pay. Most people think in terms of making sure they pay enough to cover their fixed payments. By doing this, you will keep your mortgage for the full term of the 25 or 30 year loan. The key to paying off your loan faster is to make as many 'additional' repayments as possible, VA Home Loans in Florida.

Increase the frequency of your payments

One of the best and simplest strategies to reduce the term and cost of your loan (and therefore your exposure should interest rates rise) is to make your repayment on a biweekly rather than monthly basis. By dividing your monthly payment into biweekly, you will effectively pay the same annual amount, but the outstanding balance on your loan will decrease more quickly.

Surprisingly, this change can cut thousands of dollars and years off your mortgage.

The reason for this is that there are 26 fortnights in a year, but only 12 months. Paying biweekly means that you will indeed make 13 monthly payments each year. And this can make a big difference.
Have you considered a professional package?

Most lenders offer a variety of professional packages to clients who are prepared to pay a small monthly fee. These packages offer a reduction to the standard variable interest rate, can come with cheaper home insurance, free credit cards, and a host of other options.

Consolidate and save

If in addition to your home loan, you also have other outstanding loans, such as personal loans, credit cards, car loans, etc. By consolidating all of your other outstanding loans on your mortgage, you can generally significantly reduce your overall loan obligations and thus have more funds available to apply to your mortgage.