ybrs top 25tips 4paying off ur homeloan faster

By Jonathan Chancellor
Monday, 29 July 2013

The money managers at Yellow Brick Road have offered their top 25 tips to assist borrowers pay off their home loan faster.

1. Look outside the top four banks – there are lenders and offers out there that can be better for you

2. Pay your loan off weekly or fortnightly rather than monthly – this will put you ahead over the course of the year, and the life of the loan

3. If interest rates drop, keep your repayments at the level they were before the fall

4. Choose a loan with offset or redraw

5. Put your salary into your home loan, and then use an interest-free period credit card to cover your day-to-day expenses. Then use your offset or redraw account to pay off your credit card debt before you incur interest costs

6. Use a credit card program that allows you? to convert points to cash, then you can use the cash to pay down card balances, keeping more cash in your home loan

7. Put your annual tax return back into your home loan

8. Don’t take interest only option, always pay principal + interest

9. If fixing your rate, make sure you can pay off additional payments on your loan, otherwise ?you will restrict your ability to accelerate the reduction of your debt

10. Know what your fees are, both for your home loan and your bank transaction account. Remember the lower the fees, the more you can pay off your loan

11. Know your home loan rate and how it compares. Over time small variances add up – but remember that you need to weigh up loan flexibility and access to expert advice as they can be just as valuable to you

12. Know the payout penalties attached to your loan and how long they apply. This is important should a better loan option become available in the market some time in the future, you don’t want to suffer large transfer costs to transfer to the new loan

13. If you have higher cost deb, credit cards, personal loans or car loans then pay them off first – get rid of this type of debt as it’s costing you the most overall

14. Pay off your non-tax deductible debt first. If you have an investment property or a loan for shares that you can claim a tax deduction for be sure to pay off your home loan first

15. Negotiate, negotiate, negotiate – fees, rates, conditions, everything is open to discussions. If you can’t do it yourself think about engaging an expert to help you

16. Beware the lure of low start or honeymoon rate offers where loans start cheap but can end up expensive when compared with general home loan rates available with comparative features after the initial honeymoon period

17. Refinancing high rate borrowings – credit cards, personal loan, and car loans into a low rate home loan can provide you with an opportunity to reduce your total interest costs. Do make sure you don’t rake up that high cost debt again

18. If you are lucky and you get a pay rise try to put as much as possible of the additional take home pay back into your home loan

19. Do the same with any bonuses or sales commissions or extra work related incentives you might receive

20. If you can, make your first payment on the settlement date of your loan rather than one month after this as the contract normally requires you will get a month ahead even before you start

21. Try to pay associated loan costs such as application fees, legal costs or home loan insurance costs from your own cash savings rather than loan adding them to your loan balance, avoiding the added interest on these costs associated with putting on the loan

22. Avoid the all too easy option of borrowing “that extra $5,000” for little extras, it ends up costing you more than double

23. Write down all your monthly expenses – it’s your budget. Then try to stick to it, cut back where you can. By putting it in writing you get a bit more accountable to the desired outcome

24. Look for a loan that is portable, that can be moved to your next home with minimal costs, as your family grows and changes the house and home loan you need also changes. Make sure you plan for it

25. Review your loan at least once a year with a qualified expert, all things change over time and it’s smart to stay on top of things.

Link- http://www.mlforum.com.au/first-home-buyer/ybr%27s-top-25-tips-for-paying-off-your-home-loan-faster/msg4342/?topicseen#new