Everyone with a mortgage looks forward to the day when the last payment is made and this financial commitment is no longer necessary. Whether the mortgage is over the family home or an investment property, the euphoric feeling is the same. With it come new possibilities as the money that has been set aside regularly for this purpose is now free to be used for something else.
Use New Strategies to Control your Mortgage
For many people this comes at the end of a long process, taking years to get to this point. How great would it be then, to take a different approach to mortgage payments, and look for ways to not only cope better, but even to shorten the duration by getting in front when it is financially possible?
By taking greater control over spending, and looking for ways to be smarter with your mortgage payments, you could even be in the situation where buying an investment property is possible. With some equity in your home, reasonable employment prospects and a good credit history, our people at Fountain Property Group could be starting you on the road to serious wealth creation.
First Things First
Let’s put first things first by offering some suggestions to better manage your current mortgage payments. Interest rates are at their lowest since the 1960s, and current indications are that they will remain low for some time. This is a great opportunity for a mortgagor to calculate repayments at a couple of points higher than their current commitment, and pay this amount off the existing mortgage. If rates do go up, you won’t notice it and you will be getting in front with every additional dollar you pay.
Don’t Waste Financial Windfalls
Often, situations occur that give us unexpected access to lump sums of money. The most common example is a tax refund, but it could also be a small lottery win or an inheritance. Most people with a mortgage spend these windfalls on consumable items, but with a little self-discipline, these could be applied to the mortgage.
Make More Frequent Payments
If your mortgage lender allows, making more frequent payments will reduce the term of your loan considerably. For example, paying a mortgage fortnightly instead of monthly will save thousands in interest payments by using simple maths. There are only 12 months in a year, but there are 26 fortnights. By paying this way, you are effectively making 13 monthly payments annually.
Save More and Spend Less
The suggestions that most of us don’t want to hear involve spending less and saving more. We are not suggesting that you withdraw from society, but some short-term pain ploughed back into your mortgage will put you in an excellent position in a few years. That investment property could well be within your reach.