Buying property in Taunton can be a challenge but many people undertake this challenge every year, and successfully buy the home of their dreams. Once you have secured your mortgage, however, you still need to pay it off. The quicker it is off the cards, the sooner you can live in your own home without a mortgage hanging over your head.
We looked at the most common ways to reduce the amount of time you spend paying your mortgage on a Taunton property. Here are just a few examples of good financial management for cutting your mortgage length.
1. Cut Your Repayment Term
Obviously, the way to cut your mortgage time is to reduce the term of the mortgage. Mostly you will have lenders offering 25 years or more, but if you can afford the higher payments each month you can pay off your mortgage in any number of years – as little as five. You end up paying less overall when you do this.
2. Pay Extra Every Month
Most mortgage deals for mortgages in Taunton allow you to increase the amount you pay back of the loan up until 10 percent, even while you are on a fixed rate. When you even slightly increase the amount you pay each month you reduce the amount you pay in total, and of course you cut the time it takes to clear the mortgage. Check to see what you can repay without risk of penalties.
3. Pay Off a Lump Sum
Again, with most mortgages this will be capped at 10 percent of the outstanding loan but you can use savings or an inheritance to pay off your mortgage in lump sums. You can end up paying off your mortgage a few years early in this way.
4. Look at Offset Mortgages
According to advice from a mortgage broker Taunton expert, you can use money you have in savings as an offset against your mortgage, meaning that you can keep your savings in case of a rainy day and get a better deal on your mortgage that reduces your debt. You’ll need to have these savings in the same bank or the same building society where you have your mortgage. You won’t get any interest on the savings but it does help to reduce the amount of money you spend on your mortgage.
5. Choose a Better Mortgage Deal
Look for a mortgage with the best interest rate and you’ll automatically be paying less over time and will be able to reduce your debt more quickly. Make sure that you look carefully at the market when you are shopping for your first mortgage, or you can look around when you are coming to the end of your fixed term.
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