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The major expense that you're going to have on your property is going to be your mortgage.
Wouldn't it be great if you could pay it off faster and if you no longer had that mortgage
to pay? If that was an investment property that means BAM you automatically got a massive
influx of cash flow because you don't have that mortgage to pay for and if that's your
own home then BAM again you've got a massive influx of cash flow because your expenses
have now dropped dramatically. When all of your friends are renting in the area imagine
owning a home without a mortgage and so all you are paying is accountant rights and insurances
and so forth. You it would be living the dream. So how can we pay off our home faster?
Hi I'm Ryan McLean from PositiveCashflowAustralia.com.au. I teach people like yourself how to find positive
cash flow properties all over the country. If you want more calculators and tools that
can help you assess the cash flow of potential property then on the first of March I'm launching
positive cash flow tolls and right now right this minute I've got a pre-launch available
which will give you a life time discount to positive cash flow tolls. It's a membership
site that allows you to access these resources wherever you are, whether you are on your
desktop or on your mobile phone. It's very valuable; lots of stuff over there. Check
it out over a PositiveCashflowtools.com and sign up today. So I want to highlight seven
ways that you could pay off your home loan fast. Let's get straight into the content
and not waste any of your time. Tip number one is to make extra repayments
so this is all BS. If you have mortgage and you make extra repayments over what you expected
to pay then your home loan is going to be paid of faster. What would generally happen
is you would generally sign up and you would get a mortgage for maybe twenty five years
and the bank will set the amount you need to pay each month so that over time you'll
pay off the mortgage in 25 years. If you go above or beyond that maybe, maybe you'll be
getting influx of cash from a commission or a bonus, or your pay goes up and you decide
to put a percentage of that pay increase on the mortgage then what's going to happen is
you're going to drop the amount of interest you'll be paying. And if you do it early then
it's going to show off and make it so much faster to pay it off. Just by adding a little
bit each and every month you can pay off your home loan years in advance. So it's definitely
something to think about if you can't scrape together any extra money to pay off your mortgage
faster. One way of doing this which I'm going to use
as tip number two is to chose your fortnightly repayments over monthly repayments. Let's
say you have a monthly repayment change it to fortnightly and harp your monthly repayment.
So if you're paying two thousand dollars a month harp it to a thousand dollars a month.
But pay that every single fortnight. The reason is because most people assume that there is
four weeks in a month but is actually little bit more than four weeks in a month except
for February. So by saying that we have twelve months of the year and there's only four weeks
in each month than four times 12 is 48 but if we say that there is actually 52 weeks
well then there's extra four weeks there in the year or two fortnights. So if you cut
your monthly repayment in half and pay fortnightly over the course of the year you're going to
make extra repayments. Obviously you need to find that money from somewhere but that
is a technique that many people use. Tip number three is to consider using an offset
account. So an offset is an account that offsets the interest that you have to pay. So in most
cases this means that if you have ten thousand dollars in an offset account that's ten thousand
dollars on your loan that you don't have to pay interest on. A lot of people are using
an offset account and they'll get their work income paid into this offset account or maybe
other income paid into it as well. And so while you have it and while sitting there
before you spend it it’s offsetting your mortgage- therefore you're paying less interest,
therefore you're paying off the principal faster fixate your payments the same. By using
an offset account and using it wisely you can lower the interest that you're paying
and you can therefore pay off your home loan faster.
Tip number four is to move your money around the smart way. Recently I did an interview
with Don from Mortgage Choice. You can check him out by going on a pci.im/don. Basically
hat he was talking about was that some investors are up for having the offset account on their
home loan but not necessarily using offset accounts on their investment property. So
what these investors would do is they would take money and rental income from their investment
property and put it in the offset account that offsets their home loan. And what this
means is that they're maximizing the tax deductions on the interest they’re paying on the investment
property and instead they're offsetting that money at the home loan. So they are paying
off the non-tax deductible home faster and maximizing a tax deductions on their investment
property. By moving money around in a smart way you can maximize tax deductions, you can
maximize your offsets and pay off your loans that much faster. Please, please, please speak
to a professional about this; speak to a tax accountant about this. Your accountant can
help you work out what's best for you. This is not financial advice just general education
stuff, that's my disclaimer. Tip number five is to consider refinancing
every so often. Depending on how the market goes and depending on the changes lenders
make you might not be getting the best home loan for yourself and nowadays getting out
a home loan isn't as expensive as it used to be. So by going and seeing your mortgage
broker, looking at refinancing you may be able to get yourself into a better home loan
where your payments are less. If you choose to then pay the same amount regardless you
can actually lower the amount of time it takes you to pay off your home loan. If you want
some brokers that I've interviewed I recommend to head over to PositiveCashflow.Astralia.com.au/brokers.
I've got a list of brokers that you can check out there. By refinancing, making sure you
always have the best loan for you, you can make sure that your repayments are lower so
you can pay it off faster. Tip number but six is to get rental income.
So this could be from your own home or this could be from an investment property but look
at ways of increasing your rental income or actually getting in rental income. For many
people nowadays especially in the New South Wales where they have made it easier to get
granny flats approach. There's a lot of home buyers who are now going ahead and building
granny flats or renting out their granny flats to get extra income to pay off their mortgage
faster. And so this is something that you could consider. If you have an investment
property you could also look for ways to increase the rental income, maybe by doing renovation,
maybe by adding a granny flat, there's many different ways that you can increase your
rental income and get more rental income to help pay off your property faster. So always
look smarter ways to do that. And tip number seven is to choose your loan
wisely and I always recommend that people go and see a mortgage broker to help them
do this because there's something like over 30 lenders out there who are probably willing
to lend you money and for every person the lender that's best for them is going to be
different. So by going to a mortgage broker you get access to all of those lenders but
you get to say which one works best for you rather than just walking into your bank and
choosing the loan that they have. By going to a mortgage broker you can get access to
many loans and you can choose the loan that's best for you. Maybe that's best in terms of
borrowing capacity, maybe it's best in terms of fees, maybe it's best in terms of the interest
rate. Whatever it might be your mortgage broker can help you with that. So go ahead get the
best loan for you so that you can afford to pay off more of your principal faster and
get rid of that loan faster. For more videos, articles & podcasts just like this one head
over to PositiveCashflowAustralia.com.au or the short link if you are on your mobile phone
is pci.im so until next time stay positive!