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Tips to Pay Off Your Mortgage Loan Faster. Generally, people pay their funding ahead of the term in which they hire it. Discipline is another factor that drives you into owning the home you worked so hard for.
The first thing you should do when buying a home is to collect the down payment. But what's next? We have some tips to help you pay off your mortgage loan faster.
One of the main benefits of paying your mortgage loan faster is that you not only have a 100 percent home but also have better personal finances, according to Leonardo González, real estate analyst at Propiedades.com.
However, if you decide to buy a second property in the medium or long term, you can access a higher quality property. As well as a new loan with better terms.
How long does it take to pay a loan?
According to Fernando Soto-Hay, general manager of Tu Hipoteca Fácil, the useful life of mortgage loans in Mexico is approximately eight years.
“Generally, people pay their funding before the term in which they hire it. That is, 15 or 20 years ago, ”he adds.
How do you do that?
According to specialists like the manager of Tu Hipoteca Fácil and Juan Kasuga, managing partner of Creditaria, you can use your extra income to pay off your mortgage loan faster.
It is important that you see as additional income, those that are not acting as your family mattress, or that of your company, if you have one. Practically, it's the money that you haven't thought about.
Kasuga is considering advantages in this area. “In general, people who work in a company receive a bonus. Ideally, you should use a significant percentage of this benefit to prepay the mortgage, ”he says.
To do this, you need to go to your bank and tell the manager that your payment will be applied to the principal and that the term will be shortened.
Use your extra income to pay off your mortgage loan faster / Image: Micheile Henderson via Unsplash
Discipline is another factor that drives you into owning the home you worked so hard for.
Kasuga says the first thing you should ask your bank is whether it is possible to advance the amount you have set each month. For example, find out if you can allocate 20 percent more to the monthly contribution.
Another option is to turn to specialized companies like Tu Hipoteca Fácil. They will give you advice and help you improve the terms of your loan, says Fernando Soto-Hay. Ideally, you should do this while you are aware of your payments.
The specialist emphasizes that you should not be tempted to extend the deadline again. "You have to set the term equal to or less than what you had," he says.
Let time play in your favor
The three experts add that reducing time or cost has a greater impact if you start making the first prepayments to the lender from the start of the loan term.
"Ideally, the greatest number of contributions you make in the first five years of the loan," they point out.
It's time to get down to work and implement these tips into your financial strategy to repay your mortgage loan faster. With them you will pay off your debts quickly and practically.