10 Tips For Paying Off Your Mortgage

Home » Refinancing » 10 Tips For Paying Off Your Mortgage

Posted date: January 30, 2011 | Tags: , | No comment

Many home owners at one time or another contemplate refinancing their home loan. Depending on your current loan and what new loans are costing, the decision can be a wise one, or it may totally not be worth it. If you are considering refinancing your loan here are some things to consider.

Try Negotiating With Your Current Lender First

Many times your current lender will offer you a deal for refinancing your home loan in order to keep your business. It is a great place to start and if it turns out to be a good deal, it will most likely be a much easier process than switching lenders. Before calling your lender to negotiate, find out what else is currently being offered from other home loan lenders. Use this information as a means to negotiate a better deal.

Be On The Lookout For Lenders Who Are Running Promotional Discounts

Competition between lenders at times can be fierce. When you are working on a home loan comparison, be sure to watch for any promotional discounts being offered that might save you money. For example, lenders might offer a no fee application process or a reduced start up fee. If they aren’t advertising, be sure to ask. Sometime you can even get the lender you want to use to match another’s lender’s special.

Consider Fees That May Make Refinancing Not Worth It

When you are weighing your options on whether or not to refinance you also need to look at what fees you will have to pay in the process. Sometimes, the fees may exceed any savings you might get from refinancing, and at other times, you may not have the funding available to enter into a home loan refinance. Here is what you need to look for.

  • Are there any exit or break fees that you will need to pay. Lenders have been able to charge exuberant exit and break fees and this can keep some people trapped in their current home loan. This rule will be changing later this year, but for now, check with your lender to see how much money, if any, you will need to have for an exit fee of your current mortgage.
  • On your new home loan, find out what the start up or establishment fee will be. This can be several hundred dollars.
  • Really look at the new interest rate. Is the savings you are going to see enough to make refinancing worth it? Avoid loan packages that offer lower introductory rates, unless you want to be paying a lot more later on. Most times these types of loans are not worth it in the end.
  • Find out what your stamp duty will be. Yes you do have to pay stamp duty when you refinance your home loan. Depending on where you live and how much your home is worth this fee can be into the thousands of dollars. You certainly don’t want to be surprised by that bill.

Tips For Paying Off Your Mortgage

Whether you decide to refinance or to stick with your current home loan, here are some basic tips that can help you manage and pay off your home loan successfully.

  • Always check your statements and be sure to pay your mortgage on time.
  • If you can, increase what you pay each month, this can take months and even years off your mortgage repayment.
  • Switch to a fortnight repayment plan if it is available through your lender and if you are financially able to. If you go from making monthly to making fortnight payments, this will allow you to pay one full extra payment each year.