How To Pay Off Home Loans Ahead Of Schedule

In this article, Barry Kloogh talks about how to pay off home loans ahead of schedule, and gives you some great tips for getting out of debt as soon as possible.

Getting out of debt is an amazing, freeing feeling. My clients often tell me that there is no feeling like the feeling you get when you make your last payment and eliminate a debt for good. When clients utilize my Debt Breaker program (find out more by visiting www.debtbreaker.co.nz), they typically manage to free themselves from even larger debts within 7 years, and this often means that they pay off home loans ahead of schedule as well.

If you would like to experience the freedom that comes from eliminating your mortgage earlier than the term of your loan, then you need only make a few adjustments in the way that you make payments. Of course, the terms of your loan may make it easier or more difficult to do this, but checking with your loan officer or reading the fine-print in the loan agreement should show you which of these methods you might be able to employ.

1… Make Extra Payments

Some loans allow you to make extra payments. In other words, if you usually make a monthly payment, then this method might involve making a small additional payment at the opposite end of the month. Making extra payments like this on a consistent basis can seriously cut into the interest that you will end up paying, and can drastically reduce the term of your loan.

2… Pay Extra On Your Payments

You would be amazed at how paying just $50 more per payment can add up over the course of time! This can reduce your interest costs by thousands of dollars, and can literally shorten the term of your loan by years.

3… Pay Off Lump Sums On Your Loan When Possible

If you make lump sum payments on your home loan either once, or even a few times per year. Just making one lump sum payment of a few thousand dollars can take years off of the term of your loan, and can save you thousands in interest over time!

4… Keep The Same Monthly Payment, Even When The Interest Rate Drops

A lot of people are tempted to pay a lower monthly rate when they experience a drop in interest rates, though this is something that you should try to avoid if you can! Continuing to pay the higher monthly payment may not give you any more spending money, but it will pay down your principle, which will result in a shorter term loan and less spent on interest in the long run.

If you want to pay off home loans ahead of schedule, then the very best thing to do is to consult your financial advisor or the loan agreement to see what your options are. Odds are good that at least one of these tips will work for you, so try to find out what you can and cannot do to start lowering your principle and paying off your mortgage. 

What To Do When You Can Barely Make Your Mortgage Payments

In this article, Barry Kloogh talks about what actions you can take to alleviate the pressure caused by barely being able to stay on top of your monthly bills.

Financial difficulties are everywhere. They are all around us. People experience them every day. They can have a very negative impact on our lives, and they can cause a lot of worry, stress, and anxiety. But one of the crucial things to understand about financial difficulty is that it only comes about when we make decisions that create it.

In my book The Money Cookbook, I make a statement in the summary that I believe applies to this topic rather well.

“An unfortunate fact is that our education systems don't teach our children how to manage money. Ironically though, the people who succeed in life are the ones who make it a study after school. The people who stop their education before learning how to handle money are the ones who end up dead broke or dead before their expected lifespan. And finances and investment don't necessarily have to be intense college courses. People like you, just need to find a guide, like a mentor or a financial advisor, who can supply them with the foundational education so that they can find the best tools for themselves.”

In consulting with clients through my Debt Breaker program (www.debtbreaker.co.nz), I have come to realize that every situation is different. In fact, being a financial advisor might be as much about doing background research and knowing the client as it is about knowing mathematics and finances. And if there is one thing that is for sure, it is that financial difficulty is much more likely to occur when you do not make a budget and regularly compare your spending to it.

Why is a budget important?

Most people put together a guesstimate-type budget at some point or another. In fact, some people even put quite a bit of thought into their financial allotments. They get out the calculator, build a budget spreadsheet, and make sure to double check everything. The only problem is that most people don’t regularly compare their spending to their budget to see if there are any inconsistencies… and the failure to do this can lead to a multitude of problems!

So what do you do when you can barely make your mortgage payments? What is the first step towards gaining financial independence, and how can you aspire to achieve freedom from debt without falling behind?

These are great questions. First of all, it never hurts to meet with a financial advisor… so that might be a great first step.

Otherwise, the first thing that you need to do is to look at your income and plan a budget for expenditures. Once you plan your budget, make sure to regularly check your spending against what you have planned, and make sure to remedy any inconsistencies. Controlling your spending is much easier when you are constantly scrutinizing it, and a budget is a great tool for keeping your own spending in check.

Financial difficulties almost always occur when money is being wasted somewhere, and putting together a budget is a great way to spot waste before it gets out of hand. If you can eliminate waste and find a way to only spend what you can afford in the different categories on your budget, then you should quickly see more money made available for crucial bills and payments.