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Relieve Mortgage Stress…

Relieve Mortgage Stress…

Finding Ways to Pay Off Your Mortgage Faster

Becoming a home owner can undoubtedly give your family a real sense of security but it can also add stress, particularly for autism families who have additional expenses to consider. Shouldering the responsibility of long-term debt, coupled with the ongoing expenses of therapy and support services, can be difficult to manage. With a loved one on the spectrum, no doubt you’re keen to reduce your financial liabilities and put those funds to better use… as quickly as possible!

Fortunately, if you’re prepared to put in the effort, there are strategies available to help ease the financial burden of your mortgage repayments.

When considering a home loan, borrowers most often answer the “Which lender?” question by opting for the best interest rate. But, whilst enticingly low rates can be hard to resist, they shouldn’t be the only factor you consider. Not if you’re serious about paying your home loan off sooner by making your money work smarter, not harder.

Choosing a home loan is harder than it first seems

It’s common knowledge that loan rates and packages can vary wildly from bank to bank. A lot depends on the timing of offers, whether the Reserve Bank is predicted to make a rate cut, and a bank’s recent performance, for example. Even political factors and bad press can make a difference. Weighing up the benefits of one deal against another can be difficult, too. How can you really be sure you’re comparing like with like?

It’s a frustrating scenario for potential borrowers because what may seem like a great offer today might not be tomorrow – uncertainty everyone can do without. In particular, borrowers coming off a fixed rate period are often jolted by the harsh reality of standard variable rates being less than attractive, with any tiny rate reduction their bank may offer as a “loyalty reward” being cold comfort indeed.

Work out your strategy to pay off your loan sooner

So, is there a better alternative than chasing the cheapest interest rate? There certainly is. Working with an experienced lending professional who’s focused on helping you to pay off your home loan sooner is a very good start. Their job is to take the time to fully understand your personal financial circumstances and establish your life goals with you. This is a really important step and its value shouldn’t be under-estimated. Every individual and each family are different, so there’s no ‘one size fits all’.

Once the lending professional has a very clear picture of you and your needs, they can begin to identify the best strategies for utilising your total household income and save you thousands in repayments and knock years off your home loan. In fact, putting such plans in place can effectively halve the interest rate you’re paying, giving your back pocket a much greater boost than any temporary interest rate offer ever can.

Look for lenders whose products suit your long-term plans

Once you’ve decided on workable strategies, the next step is to look for lenders happy to allow you to put them into action using their loan products. There’s a big difference between lender products, so choosing those that will best support your plans is crucial if you want to see the budget savings you’re hoping for. And that’s where the lending professional’s in-depth experience and market knowledge becomes invaluable. They’ll be able to clearly identify differences in credit policy and assess the likelihood of approval. Only then will they factor in interest rates, offset accounts, split loans, access to branch networks and the like to help you make your final decision.

How do you choose a good lending professional?

The best way to approach it is to think of it as a job interview. After all, you’re contracting potential candidates to look after your financial interests – and your future hopes and dreams – so don’t just settle for someone who talks interest rates alone. Instead, put their skills to the test by inviting them to demonstrate the strategies and long-term value they can provide, giving you a firm foundation on which to make such an important decision.

At the end of the day, working with a lending professional who is focused on your best interests and who is not aligned to a particular bank or lender can help you avoid years of unnecessary repayments, enabling you to pay off your home loan far earlier. When it comes to investigating practical pathways to owning your home outright sooner, procrastination may cost you dearly because you may be paying a great deal more for your home over time than you need to. That’s why it makes good sense to invest time now in leveraging the expertise of an experienced lending professional to discover better, faster ways to become mortgage-free.

Geoff Aitken
Director – Financial Adviser
One Wealth Advisory