A home loan may be the biggest debt you will ever take. It is such a large and long-term financial commitment but it can be surprisingly easy to pay it off, at least a little earlier with savings over the long term.
- The bigger the deposit, the better
It is wise to allocate whatever money you can to your deposit when applying for a home loan. This makes your application more likely to be approved by the bank. If you pay a R 20 000 deposit on a R1 million home loan it will reduce your total repayments by approximately R 41 656.
- Secure a lower interest rate
Use an expert mortgage originator to negotiate on your behalf to get the lowest possible interest rate.
- Pay extra each month
The simplest, ongoing way to reduce the term and cost of your home loan is to pay in a little extra each month. Even paying in as little extra as R200 extra a month, will reduce the term of the repayments by more than a year. Obviously, the more you pay in – the more you will save.
- Pay in unbudgeted extras
Paying in extra at any point reduces the interest from that point onwards, so the earlier that you can make any bulk payments into your bond, the better. This is especially useful if you have an access bond, because the deposited extra money will reduce the interest you owe, but can be withdrawn again should you need it.
- Beat the interest calculation
Interest is calculated daily and therefore you can also reduce your total repayment amount by making your bond payments earlier in the month than required. Each day of interest saved positively impacts the overall repayments.
Did you know Iemas offers a bond origination service in partnership with Mortgage Max?
For more information contact us:
0861 043 627 | SMS ‘Housing’ to 32297 (R1/SMS) | email firstname.lastname@example.org
Adapted from: eNCA.com
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