7 Ways To Pay Off Your Home Loan Fast (Ep93)

The major expense that you’re going to have on your property is going to be your mortgage. Wouldn’t it be.

The major expense that you’re going to have
on your property is going to be your mortgage. Wouldn’t it be great if you could pay it off
faster and if you no longer had that mortgage to pay? If that was an investment property
that means BAM you automatically got a massive influx of cash flow because you don’t have
that mortgage to pay for and if that’s your own home then BAM again you’ve got a massive
influx of cash flow because your expenses have now dropped dramatically. When all of
your friends are renting in the area imagine owning a home without a mortgage and so all
you are paying is accountant rights and insurances and so forth. You it would be living the dream.
So how can we pay off our home faster? Hi I’m Ryan McLean from PositiveCashflowAustralia.com.au.
I teach people like yourself how to find positive cash flow properties all over the country.
If you want more calculators and tools that can help you assess the cash flow of potential
property then on the first of March I’m launching positive cash flow tolls and right now right
this minute I’ve got a pre-launch available which will give you a life time discount to
positive cash flow tolls. It’s a membership site that allows you to access these resources
wherever you are, whether you are on your desktop or on your mobile phone. It’s very
valuable; lots of stuff over there. Check it out over a PositiveCashflowtools.com and
sign up today. So I want to highlight seven ways that you could pay off your home loan
fast. Let’s get straight into the content and not waste any of your time.
Tip number one is to make extra repayments so this is all BS. If you have mortgage and
you make extra repayments over what you expected to pay then your home loan is going to be
paid of faster. What would generally happen is you would generally sign up and you would
get a mortgage for maybe twenty five years and the bank will set the amount you need
to pay each month so that over time you’ll pay off the mortgage in 25 years. If you go
above or beyond that maybe, maybe you’ll be getting influx of cash from a commission or
a bonus, or your pay goes up and you decide to put a percentage of that pay increase on
the mortgage then what’s going to happen is you’re going to drop the amount of interest
you’ll be paying. And if you do it early then it’s going to show off and make it so much
faster to pay it off. Just by adding a little bit each and every month you can pay off your
home loan years in advance. So it’s definitely something to think about if you can’t scrape
together any extra money to pay off your mortgage faster.
One way of doing this which I’m going to use as tip number two is to chose your fortnightly
repayments over monthly repayments. Let’s say you have a monthly repayment change it
to fortnightly and harp your monthly repayment. So if you’re paying two thousand dollars a
month harp it to a thousand dollars a month. But pay that every single fortnight. The reason
is because most people assume that there is four weeks in a month but is actually little
bit more than four weeks in a month except for February. So by saying that we have twelve
months of the year and there’s only four weeks in each month than four times 12 is 48 but
if we say that there is actually 52 weeks well then there’s extra four weeks there in
the year or two fortnights. So if you cut your monthly repayment in half and pay fortnightly
over the course of the year you’re going to make extra repayments. Obviously you need
to find that money from somewhere but that is a technique that many people use.
Tip number three is to consider using an offset account. So an offset is an account that offsets
the interest that you have to pay. So in most cases this means that if you have ten thousand
dollars in an offset account that’s ten thousand dollars on your loan that you don’t have to
pay interest on. A lot of people are using an offset account and they’ll get their work
income paid into this offset account or maybe other income paid into it as well. And so
while you have it and while sitting there before you spend it it�s offsetting your
mortgage- therefore you’re paying less interest, therefore you’re paying off the principal
faster fixate your payments the same. By using an offset account and using it wisely you
can lower the interest that you’re paying and you can therefore pay off your home loan
faster. Tip number four is to move your money around
the smart way. Recently I did an interview with Don from Mortgage Choice. You can check
him out by going on a pci.im/don. Basically hat he was talking about was that some investors
are up for having the offset account on their home loan but not necessarily using offset
accounts on their investment property. So what these investors would do is they would
take money and rental income from their investment property and put it in the offset account
that offsets their home loan. And what this means is that they’re maximizing the tax deductions
on the interest they�re paying on the investment property and instead they’re offsetting that
money at the home loan. So they are paying off the non-tax deductible home faster and
maximizing a tax deductions on their investment property. By moving money around in a smart
way you can maximize tax deductions, you can maximize your offsets and pay off your loans
that much faster. Please, please, please speak to a professional about this; speak to a tax
accountant about this. Your accountant can help you work out what’s best for you. This
is not financial advice just general education stuff, that’s my disclaimer.
Tip number five is to consider refinancing every so often. Depending on how the market
goes and depending on the changes lenders make you might not be getting the best home
loan for yourself and nowadays getting out a home loan isn’t as expensive as it used
to be. So by going and seeing your mortgage broker, looking at refinancing you may be
able to get yourself into a better home loan where your payments are less. If you choose
to then pay the same amount regardless you can actually lower the amount of time it takes
you to pay off your home loan. If you want some brokers that I’ve interviewed I recommend
to head over to PositiveCashflow.Astralia.com.au/brokers. I’ve got a list of brokers that you can check
out there. By refinancing, making sure you always have the best loan for you, you can
make sure that your repayments are lower so you can pay it off faster.
Tip number but six is to get rental income. So this could be from your own home or this
could be from an investment property but look at ways of increasing your rental income or
actually getting in rental income. For many people nowadays especially in the New South
Wales where they have made it easier to get granny flats approach. There’s a lot of home
buyers who are now going ahead and building granny flats or renting out their granny flats
to get extra income to pay off their mortgage faster. And so this is something that you
could consider. If you have an investment property you could also look for ways to increase
the rental income, maybe by doing renovation, maybe by adding a granny flat, there’s many
different ways that you can increase your rental income and get more rental income to
help pay off your property faster. So always look smarter ways to do that.
And tip number seven is to choose your loan wisely and I always recommend that people
go and see a mortgage broker to help them do this because there’s something like over
30 lenders out there who are probably willing to lend you money and for every person the
lender that’s best for them is going to be different. So by going to a mortgage broker
you get access to all of those lenders but you get to say which one works best for you
rather than just walking into your bank and choosing the loan that they have. By going
to a mortgage broker you can get access to many loans and you can choose the loan that’s
best for you. Maybe that’s best in terms of borrowing capacity, maybe it’s best in terms
of fees, maybe it’s best in terms of the interest rate. Whatever it might be your mortgage broker
can help you with that. So go ahead get the best loan for you so that you can afford to
pay off more of your principal faster and get rid of that loan faster. For more videos,
articles & podcasts just like this one head over to PositiveCashflowAustralia.com.au or
the short link if you are on your mobile phone is pci.im so until next time stay positive!

5 thoughts on “7 Ways To Pay Off Your Home Loan Fast (Ep93)”

  1. Bro We bought a property on loan and it's loan is 50,000 Rupees and Our dad left us ..we r in tension please help me what to do ..Bank will capture this property

  2. Great tips, I also like splitting the monthly home loan repayment into half then making it every fortnight – in effect you make an extra repayment per year and can generally cut 3-4 years from your home loan.

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