Owning your home is a constant education. There is so much to learn and take in. it is nothing short of a minefield. If you are keen to learn more about repaying your mortgage, you are in the right place. There is a plethora of options available to you. What is more, these options could save you a substantial amount of money in the future. Intrigued? You should be!
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Overpayments
There is no risk with overpaying on your mortgage. If you are keen to pay your mortgage off early, you will save a great deal of money in the long haul. What is more, you will have your debt paid off in the blink of an eye. The thought of having a thirty-year mortgage may be unappealing, but by overpaying you will be debt free, sooner. Estate agents in Walsall actively encourage people to take this route.
With interest rates being at an all time low in the UK, many people are making the bold step of overpaying on their mortgage. This is so that they can save a lot of cash in the long term. What is more, this step can help you manage your money better for when interest rates go back up. It is a rather savvy option for many.
Are You Liable to Face Penalties if You Overpay?
Read the fine print of your mortgage agreement carefully. You may not be allowed to overpay. With such a substantial financial decision comes a lot of research. This is not something that can be done on a whim.
Overpayment penalties can be incurred if you have a mortgage that forbids this. Fixed, tracker and discounted deal mortgages may inhibit overpayments. This means that you will punish for trying to overpay. Of course, the punishments are distributed by your mortgage provider. You won’t be flogged, but you may be forced to pay out more money.
Typically, lenders don’t want you to make money from your investment. Once you have a deal, they don’t want you to be the one to profiteer from it. In short, it is not in their financial interests for you to pay your mortgage early. They are the ones that lose out. Sneaky, but true. Let’s face it. The longer that you take to repay your mortgage, the more money that they earn from you. Check with your lender and avoid being penalised.
Many mortgage providers will allow you to repay over 10% of the mortgage debt. This is great news for many. If you can afford it, then go for it. The quicker you are debt free, the better.
Do You Have Other Debts?
Make a list of your existing debts:
Credit cards
Overdrafts
Store cards
Hire purchase
Personal loans
If you have any of the above, pay them first. These will have the higher rates of interest. By paying your existing debts off first, you will be in an excellent financial situation. The interest rates on personal loans are high at the moment. Pay them off and feel the benefit of doing so.