When you pay off your mortgage, it gives you the personal and financial security of owning your home outright, plus you no longer have the monthly cost of repaying your lender.
Here are seven things you can do that should help you get there quicker:
- Consult an independent, regulated financial adviser
If you have savings or get bonuses on top of your salary that you put away in a pension or other retirement vehicle, it’s worth discussing with a financial adviser whether it might be better to use those funds to pay down your mortgage or even pay it off completely.
Even though mortgages are a relatively cheap way to borrow money, if paying yours off is a priority, then talk things through with a qualified adviser who can help you put a plan and timescale together.
- Work with a broker
There are thousands of mortgage products in the marketplace and working with a broker that has access to all of them can help ensure you have the most appropriate and cost-effective deal. The interest rate is only one consideration – tie-in periods, redemption penalties and whether the lender will allow you to make overpayments are other significant factors.
Currently, you can lock down deals six months ahead of time, so if you’re on a fixed-rate deal at the moment, do get in touch with a broker at least six months before it expires to check out your options.
- Check your current property value – has your LTV improved?
If your property has gone up in price so that you now have more equity, that could reduce your loan to value (LTV) and you may have access to better interest rates. Even by keeping your monthly payment amount the same, you could end up paying off the mortgage more quickly.
- Can you afford to overpay?
Having a mortgage product that permits overpayments can be useful, particularly if you have a job where you get periodical bonuses. Even if your income is the same every month, look at whether you could afford to tighten your belt and regularly pay an extra £50 or £100 into your mortgage account.
- Shorten your mortgage term
If you think you can afford to make regular overpayments, it’s worth looking at reducing your overall mortgage term. Although this will increase your minimum monthly payments, you can pay off the mortgage sooner and pay less in interest overall.
- Increase your income from work
If you’re able to work more hours, you could look for extra part-time or evening work. But before doing that, it’s well worth speaking to your employer about the possibility of a pay rise or extra overtime – you may be surprised what you can get just by asking.
- Take in a lodger
If you have a spare bedroom, why not take in a lodger? You can earn up to £7,500 tax free under the government’s Rent a Room Scheme, and you don’t need to complete a tax return unless the rental income is over this amount.
To discuss the best current mortgage options for you, get in touch with our experts via online chat, by completing our enquiry form or by calling 0800 144 4744.
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