So You Got Your New Home Loan

By: Allan Wilson

After you acquire your loan, you can suddenly feel a bit overwhelmed at your new responsibility. This set of tips will hopefully set your mind at ease and help make your newest commitment a bit easier.

Make Your First Payment Quickly

Make your first payment on your home loan as soon as you can. This will instantly reduce your premium, and put you ahead. It will put you in good graces with your lender as well.

Use Internet Banking

Most banks offer Internet banking. This is a low-maintenance, low-cost way to manage your home loan. Most even offer direct bill pay so you don't ever forget to make a payment.

Quit Smoking

It may seem silly, but quitting smoking can help you repay your loan quicker. Think about it: if you smoke a pack of cigarettes a day, it's costing you almost $3000 a year. If you quit, you can put the daily savings of $8 or so aside and pay an extra $240 each month off your mortgage balance. Of course you can adapt this same idea to other non-essential items as well.

Make Sure Your Broker Delivers

It can be frustrating with all the paperwork and deadlines, but remember that it's your responsibility as a buyer to make sure that your mortgage broker does everything he's supposed to do before, during, and after your loan is in place.

Keep Accurate Records

It's important to keep accurate records of all things to do with your loan. The more accurate, the better. This is the best way to protect yourself from any duplicate billings that your bank may accidentally charge you.

Take Advantage of Rate Drops

If your payments drop because interest rates have fallen, try to keep paying your old payments. This can knock years off your loan, giving you more equity in the process.

Consider Weekly or Fortnightly Payments

By paying fortnightly payments or weekly payments you can repay your loan much faster. In both cases, you'll be making the equivalent of 13 monthly payments each year, reducing the principal and term of your loan.

Use Offset Accounts

An offset account is a savings account that your lender gives you. It's linked to your mortgage account so that the interest earned is applied to the balance of the mortgage. This payment is also tax-free.

Continue to Improve Your Credit Rating

Through the newness and responsibility of your home loan, make sure that you keep up on all of your other payments. There may come a day when you can refinance, and keeping your credit good will be vital.

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