Paying Off Your Mortgage Faster

April 17, 2012 by  Filed under: Loans 

When deciding to buy a home most borrowers don’t hope to make payments on it forever. Achieving full ownership of a home is every homeowner’s dream. No more lenders, no more monthly payments…it may sound too good to be true but it’s not. Homeowners in Australia are more financially savvy these days than in years past and they are using this knowledge to reduce their monthly payment amounts and term lengths as a matter of course.

Add Extra Payments

A sure-fire way to pay down your debt faster is to make extra payments. Whether it’s an extra $100 per month or an extra mortgage payment each month, homeowners can see their principal decrease considerably. Take a look at your finances to see if you have extra money to pay toward your home. Then start making extra payments right away. Even if you’ve been making your scheduled monthly payments for years, it’s never too late to start paying more.

Make Payments More Often

The majority of payments are scheduled monthly. Another way to pay down your home debt faster is to cut the monthly payment amount in half and make payments every two weeks. While this might not seem beneficial at first look, this payment plan actually results in the equivalent of an extra monthly payment each year. And these extra payments add up over the life of your loan, reducing your principal at a faster rate.

Refinance

When homeowners secure financing they needn’t be committed to that deal forever. In fact, many homeowners refinance their homes every 4 to 5 years. Interest rates increase and decrease constantly and borrowers take note. When rates are low, it’s a great time to take a look at your options and do some comparison shopping. How do your current rates compare? Could you get a lower rate? How much would that save you for the life of your mortgage? Refinancing can help you reach that dream of true home ownership more quickly.

Accelerator Software and Reduction Schemes

There has been a lot of controversy surrounding software programs that claim to help homeowners pay down their debt faster. Some programs encourage homeowners to open lines of credit and suggest it will help them become debt-free. In reality, many of these credit lines come with higher interest rates that don’t benefit homeowners at all. They actually put the borrowers in a less desirable position.

Don’t fall prey to a scam that could end up doing more harm than good. Take time to do your homework. Consult with lenders about your options and make sure that you can afford the solutions presented to you. The best ways to pay down your home debt faster are through refinancing and additional payments…not through “magic” solutions.

Tomorrow Finance provides tools to compare home loans from Australia’s lenders. When you find the best home loan rates, you save!

Article Source:
http://EzineArticles.com/?expert=Tony_J._Stephens

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