5 Simple Steps to Save on Your Mortgage (Housing Loans)
1. Check on your loan package
Make sure you know the interest rates that you are tied to. What is the current BLR fixed by the Central Bank? What is the package you are servicing now?
2. Shop around for a more attractive package for a loan refinancing
As BLR can fluctuate, you may be surprised to learn that you are actually paying more than the current rates. In this case, shop around for a better package from other financial institutions and do a refinancing. Also check for additional cost that may be applicable such as legal fees, insurance, etc. Note: You must ensure that you are not within the lock-in period of your loan.
3. Request for a discount on interest rate
Instead of jumping over to other banks, you can also request for a reduction in the interest rates from your existing banker. Banks are so competitive nowadays that they would be obliged to serve you, without any additional cost incurred.
4. Make bi-monthly payment
Usually, the bi-weekly mortgage programs will be making payments to the principal amount, hence reducing the principal faster, saving you money. The factors affecting how fast you can pay off your loan are again (sigh!) your interest rate and when you begin making the bi-weekly payments. The faster you make your payments in this mode, the faster you can expect to complete your loan pay-off as well as make more savings!!!
5. Make payments on-time
Avoid unnecessary delay of the payment towards your mortgage. Even a few dollars every month, if accumulated over years, will be a huge amount.