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Buying a property is one of the biggest commitments you will do in your life. You are choosing a home where you will spend a lot of your life. But you are also making a commitment to a financial institution. Since very few of us can buy properties with out loans, home loans are the topic of the day.
During the term that you are repaying your home loan, most of your installments will go towards the interest, not the capital of your loan. You can save thousands on these loans. Home owners are not always aware of this.
We all dream of having a paid off property, but twenty or thirty years is a very long time to wait for this.
But, paying off your loans home loans or personal loans, early doesn't mean paying double the amount the bank is expecting. Every little bit of extra will help.
The interest on your loan is compounded daily, so paying a little bit extra will reduce the total interest that you are paying over the full loan term.
Make use of a mortgage calculator. These are reading available on the Internet. By using this tool you will be able to see how much you will be saving over a certain amount of time, even if you can only pay in an extra R200 per month.
Sometimes these amounts can be staggering. It is a good motivation to see in black and white what a difference a small amount can make over a longer period.
A word of caution – make sure your mortgage allows for early payoff and settlement. By reading through your contract you can avoid any nasty surprises in the form of early settlement fees.
In conclusion, by paying a little bit extra every month into loans, home owners can save thousands, and reach the dream of a home that they own, and not the bank, in a much shorter time than expected.
I understand if this is a lot of information to take in, so I would be happy to spend some time with you and answer any questions you have about choosing loans home owner or not. You are welcome to contact my office at 086 110 6204 or send me a personal email at: info@gpfmortgage.co.za
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