Home ownership is a rewarding investment decision. In order to attain this goal, many people consider home loans to be the easiest financing avenue to property ownership. While banks and other financial service providers have tailored distinctive home loan products, the onus remains on the home loan applicant to repay the loan and in the shortest possible time. Here are some tips on how to pay off your home loan faster.
Make a large deposit
Not only is your finance application more likely to be approved by your bank when you make a sizeable deposit towards the property, a larger deposit reduces your monthly repayment on the loan as well as the overall amount you will have to repay.
Negotiate lower interest rate
Even a small reduction in the interest rate on your home loan will significantly lower your monthly repayment. You should therefore negotiate for a lower interest rate with your loan provider or even engage the expertise of a mortgage consultant to negotiate.
Pay in extra every month
Paying even a small amount of R300 extra into your bond account each month can lower the total amount payable by a considerable amount. Obviously the more you pay in, the more you will save on the total settlement in the long run.
Pay your bond as early as possible
Try to make the bond payment earlier in the month as interest is calculated daily. This may seem like a small amount but in the long-term every little bit helps.
Use bond account to save
Depending on when your salary or other income is paid into your account, consider storing it in your bond account for a few days as this will cushion against the interest you owe on the loan.
The tips provided above should be able to assist you to reduce the total repayment amount and the term of settlement.