Sunday, 10 October 2010

How to PAY OFF YOUR MORTGAGE Early Without Paying Too Much Interest to the Bank

Most couples’ dream is to own their own house. No wonder most of us consider our home as our biggest investment and greatest asset. It represents financial security now and in the future. It is a wonderful automatic savings plan for our future.

Now a days, it is very difficult  a First Time buyer to get into the property/housing ladder because of the very stringent  credit criteria and deposit requirements of the bank/lenders. But for those who already got the mortgage/home loan, there’s a way to pay off your existing mortgage early and without paying too much interest to the lender/bank.

This is how it works.
Every time you make a payment, usually monthly, to your bank or Building Society, the money is going to pay off your mortgage. At the end of your mortgage term, you will be the proud owner of a property with a real tangible market value.
Due to the...’They don’t make land anymore...’ the value of the property cannot go down in the long term. Yes, just like any other commodity, there may be brief times in history when prices may stabilise or can drop 1% or 2%, but it is never long before prices will take off again. You will be seating on a golden nest egg which may will be worth a fortune by the time you retire.


Simple, PAY BI-WEEKLY instead of the usual monthly. How you do that? Go to your lender/bank. Tell them you want to pay BI-WEEKLY instead of monthly. No, you don’t have to refinance you present home loan/mortgage. Ordinarily, a BI-WEEKLY payment program is set up with your present mortgage.

Start benefitting immediately. On the following illustration, you will see how much you would save over the very first year.

There are 26 BI-WEEKLY periods in each year. 26 one-half payments equals to 13 full normal monthly payments, as compared to 12 normal monthly payments in a year. Therefore, painlessly, you accumulate one (1) full payment each year. And it is this which is applied to reduce your home loan/mortgage balance, so your lender/bank charges you less and less interest each year, increasing your net worth/equity in your home quicker. Take note, you’re paying 15 days earlier and your payment were applied earlier thereby reducing your home loan balance and reducing the interest).

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