Mortgage Choice Can Help Repay Your Home Loan Sooner

Online, January 24, 2012 (Newswire.com) - Becoming a better budgeter, wising up on your spending habits and making the most of any savings can help borrowers master their mortgage and own their home outright sooner, according to Australia's largest independently-operated mortgage broker, Mortgage Choice.

Local Mortgage Choice mortgage broker, Ebony Curtis said, "If your goal is to pay off your loan sooner, the beginning of the year is a great time to set new financial resolutions."

"Challenge yourself to ramp up your home loan repayments by readjusting your budget and finding ways to make extra contributions to your mortgage.

"Well thought-out saving, spending and loan repayment strategy decisions can help put you months or even years closer to living mortgage free. Keep in mind even small financial changes can have a big impact on how much interest you pay over the life of your loan and the length of your loan term."

Mortgage Choice in Cheltenham, Melbourne offers these financial resolutions to help borrowers own their home sooner:

Resolution 1. Become best buddies with your budget

If you don't already have a budget, the New Year is the ideal time to start one. Ensure it factors in all your regular spending - home and/or other loans, utility bills, medical expenses, memberships, grocery bills, insurance costs, etc. Don't forget to include funds for socialising treats. Be honest with your budget and refer to it each time you contemplate a new expense.

Resolution 2. Slash your cash limit

Consider ways to cut your daily spend. For instance, a daily caffeine hit at $4 per weekday equates to $80 per month. Did you know by making a coffee an every-second-day spend and contributing $40 extra per month to your mortgage from day one (based on a $300,000 loan over 30 years at 7%) could reduce the total interest owed by over $31,000 and the loan term by almost 2 years?

Resolution 3. Review your home loan with a fine-toothed comb

There could be underutilised loan features costing you money or features worth refinancing for. Get to know your loan's features. Your mortgage broker can help review your current loan and its features and identify any opportunities to shop around for something better suited to your goals.

Resolution 4. When rates fall, keep repaying more

If your home loan's interest rate has recently fallen, consider keeping your repayments at the higher, pre-fall rate. For example, take a home loan of $300,000 at 7% over 30 years. If your rate reduces to 6.5% and you keep repaying your loan as if the interest rate was still 7%, you could shave approximately 4 years off your loan term and save over $60,000 in interest owed.

Resolution 5. Make the move from monthly to fortnightly

Switching your monthly repayment to fortnightly may make a significant difference to your loan term and the interest owed. There are 12 months and 26 fortnights in one calendar year; by paying fortnightly, you make the equivalent of 13 monthly repayments. The savings, based on a $300,000 loan at 7% equates to around $103,000 in interest and 6 years and 6 months off the loan term.

Visit Ebony Curtis's website at http://www.mortgagechoice.com.au/anthony.smith or call 1300 302 668.