Formulate a budget for household and personal expenses, and review on a regular basis. This routine will maximize your ability to make informed financial choices and decisions.
The larger the deposit you can save the less you pay in stamp duty and other variable costs, which are calculated as a percentage of the sum borrowed.
Arrange your loan over 25-30 years, this ensures that repayments are calculated as low as possible- this acts as a safety net in case of illness, or when money may not be available as at the present.
Consider utilizing a Redraw Facility e.g. a facility whereby you can make additional repayments on your loan, ensuring access to these funds in case of an emergency.
Consider utilizing a Mortgage Offset Account.
Some lenders offer financial packages - this is where lenders may offer discounted home insurance, fee free credit cards and fee free transaction accounts. Use the savings from these financial services to reduce your mortgage principle.
Pay all initial mortgage fees and charges up front - don't add onto the loan amount.
Pay your first instalment before it is due, and if possible pay on your settlement date - don't wait.
Make repayments on your paydays; don't wait for the lenders due dates, or make repayments on a two weekly basis as opposed to monthly repayments (with this regularity, you actually make one extra repayment per year.)
Ensure any periodic service fees are paid immediately and not added directly onto the balance.
Make additional or lump sum repayments off the principle of your loan - ensure this is possible without the payment of penalties.
Set up your own personal line of credit on a standard/basic home loan. This way you pay the lower interest rate and can avoid the $300 annual fee usually charged by the banks.
When there is a reduction in interest rates, ensure your repayments don't also reduce. Keep repayments the same if you can afford to.
If you were to receive a pay increase? Consider increasing your repayments by at least 50% of the after tax increase.
Stay in touch with the mortgage market via your mortgage broker, an opportunity may arise.
Purchase a calculator - it will help you keep on track - you can calculate repayment adjustments and check that lender calculations are correct. If you are unsure of the formulas to calculate compound interest or how much you can borrow, then utilize our loan repayment calculator.
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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