Paying off a mortgage can sometimes seem like an impossible task. Ashley Ormond, author of 101 Ways to Get Out of Debt and on the Road to Wealth, tells us that with a few savvy tricks - and a little discipline - we could be sitting in our own, debt-free home faster than you can say, well, bye-bye mortgage.
I don't have to tell you that having no debts means less stress and less worry, and that can mean a healthier, more enjoyable life. To help make the whole mortgage experience a lot less daunting, I've included an extract below from an article by Helen Hawkes in the Australia Today magazine which shares some of Ashley's pointers:
Pay $1 more a day
Most people get a shock when they find out how much they still owe on their mortgage even though they have been paying it off for years. That's because at the start of the loan you are mainly paying interest, not reducing the principle. But pay off more than you have to and you can beat the banks at their own game. Even if you increase your repayments by just $1 a day, you could save around $15,000 in interest and cut almost a year off the average mortgage (of $300,000).
Don't use your mortgage to go on a holiday
Regdraw mortgages sound very attractive but if you want to get out of debt, don't do it! You'll be paying fo that holiday in Hawaii into your retirement. As Ashley puts it: "Paying off the mortgage once is hard enough. Why would you ant to repay money you have already repaid once?"
Make payments more often, without any pain
You probably won't notice if you pay fortnightly rather than monthly, but your mortgage will. In fact, you'll end up paying the equivalent of an extra month's payment each year and save around $70,000 in interest and cut more than four years off the loan term.
Weigh up the cost of instant gratification
A new television or an expensive dinner is one of life's treats. But add up the cost of those few indulgences; that money could have been used to pay out your loan faster, saving you thousands. Then think about all the guilt-free treats you'll be able to enjoy when you're out of debt. Motivated? Keep a money jar and funnel all that cash into it that would have been used for treats. You'll soon have a mortgage windfall.
If you have a money saving tip to share we would love to hear from you! Please comment below or contact us using the form at our website: http://www.from1mum2another.com/
This is general information only and is not intended to be used as financial advice.