This blog is dedicated to my mentor and serial entrepreneur Mr Harry Bozin, who has taught me everything I know about paying down the biggest debt one will ever have THE MORTGAGE and in the quickest way possible.
Whenever I share anything about how to pay your mortgage down as quickly as possible, take note and put into action the strategies and tips I share that truly work.
So, one of the major purchases individuals and couples in their lifetime take on, is when they decide to put a deposit down to buy their very own piece of paradise.
Having a mortgage is one of the biggest debts most people embark on when owning a home.
It can be one of the most stressful and worrying times in their life, often concerned how they’ll make the monthly mortgage repayments when unexpected events come up.
What a lot of people aren’t aware of when borrowing the money to buy their home, is the overall cost for paying down this debt if they don’t pay it down as quickly as possible.
Because the first 10 years of the term of the loan whether it be a 25 or 30 year loan, is paid in interest payments to their banking institution. During this time there isn’t a lot of principal paid off (the original amount borrowed) as most of it goes to paying interest payments, unless the new home owner is consciously paying extra into their home loan.
Do you know what the total cost of your mortgage is if you do not pay it down well before the end of the term of the loan?
Well, I do and it may shock you to know that on a 25 year home loan borrowing an amount of say $350,000 not paid before the 25 year mark, will end up seeing you pay an additional $236,624 for the privilege of having a home loan.
Now that’s $236,624 better in your pocket earning you money, not the banks.
Let’s look at some rough numbers on how you could grow this money of $236,624 where it would compound over the next 15 years (because that’s the time period you saved on your mortgage by paying it down in 10 years).
You could put an additional $263,529 into your pocket seeing you at the end of 15 years your initial $236,624 growing to an enormous amount of $500,153.
Now that’s how having your money work for you and not your banking institutions benefit!
So what are some of the ways you can pay this debt down as quickly as possible and be mortgage free in 10 year or less?
There are 5 steps to becoming mortgage free faster and they are:
1 SET YOUR GOAL
It’s sounds crazy for some people to set a goal for this given they generally feel overwhelmed at the amount of money to be paid back, but it can be done.
This goal is just like any other you would set.
Let’s say for example that you have a $350,000 mortgage and would like to pay this off around the 10 year mark not 25 years as per the term of your loan agreement.
Then what you would do is look at ways you could do this by looking at your spending habits and talking to your mortgage specialist to find out whether your home loan is one that will enable you to pay it down without any penalties.
2 GET A COACH
There are two coaches you will need to ensure you stay on track and on target of paying your mortgage down within 10 years and the first is a financial coach like me.
A FINANCIAL COACH is critical to keeping you focussed on your goal and guide you in making sure you’re staying on track to paying your home loan goal down in the 10 year time frame you’ve set.
The goal of the financial coach is to ensure that every bit of extra money you have, goes towards paying this debt down as fast as possible.
A financial coach is not only there for financial encouragement, but is also there for your emotional wellbeing, when at times you may feel overwhelmed and stray off course thinking you’re never going to pay this down.
The second coach is A MORTGAGE COACH. Now the major benefit of a mortgage coach is to ensure that you have the most effective home loan for you that’s working in meeting your goal of becoming debt-free in 10 years or less.
A good mortgage coach would meet with you once or twice a year to ensure that your loan meets your current life circumstances, because as we know home loans change.
A mortgage coach will be able to advise whether you are best taking advantages of lower interest rates and whether you could fix that interest rate to maximise your debt reduction strategy.
3 LEARN HOW AND WHAT YOU CAN DO TO ACHIEVE YOUR GOAL OF BECOMING DEBT-FREE SOONER.
There are many strategies about how to pay your home loan down faster and I’m afraid to say that it’s not in the banking institutions’ best interests to share with you how to pay your debt down faster.
Why, because they have forecasted what they are going to do with your extra repayments right up to the 25-year mark. So you see they want you to keep paying so they can use your hard-earned money on other investment opportunities to help grow shareholder dividend returns.
This is why working with both your financial coach and mortgage coach will see you taking advantage of strategies that you may not be aware of yet.
4 CREATE A PLAN AND STICK TO IT!
With anything in life, when you have a plan and stick to it, you have a better chance of achieving what you’ve set out.
This is where your financial coach can help create a plan that meets your requirements and lifestyle. You see we all have different priorities in life so the plan needs to be tailored to suit our own circumstances.
5 TAKE ACTION. DO WHAT OTHERS WON’T DO AND YOU WILL SEE THE BENEFITS OF BECOMING DEBT FREE SOONER.
One of the best ways to become mortgage free is do what others aren’t prepared to do.
So often we follow the herd mentality and that sees us continuing to be poor and broke.
It’s about stepping out of our comfort zone for a short period of time while the adjustments are being made and then reaping the benefits long term.
When someone has the courage to step out and become their own person and do the things others aren’t prepared to do, then they soon become the ones who are debt free, happier and living life the way they’ve always dreamed.
So let’s recap what it may costing you by not getting a coach.
Firstly, you’ve seen that you are paying out good money that you’ve worked long and hard to the banking institutions for longer than you need to.
And secondly, your hard-earned money could be working for you and not your banks, as you’ve seen in the illustration above on the benefits of compound interest, making you richer not them.
Also, you’ve read about the benefits of getting yourself both a financial and mortgage coach and this enables you to become mortgage-free sooner
** As your financial coach, I’m one that works with you regularly to help you stay focussed and on track to achieving your financial goals. As your coach, I am also here to ensure that when life suddenly throws you a curveball as it often does – you have the tools and resources necessary to stay motivated and on track.
** The mortgage coach is the one that ensures your home loan is structured and set up correctly. Utilising the latest strategies available to maximise the full debt reduction potential. The mortgage coach’s responsibility is to ensure they are working with you to understand your home loan so you can work towards paying it down as quickly as possible.
NEXT STEPS:
Financial Coach – get in touch with me today to see how I can show you how to pay your mortgage down in half the time while supporting you in achieving your financial goals sooner.
If you’ve recently lost your job or you feel you’re about to, here are some things you can do right now to make sure you survive during the uncertain weeks or months ahead.
Okay so you need cash and you need to earn it fast.
There are 3 basic things you need to make sure you have secured during this rough uncertain and unpredictable time and that is:
Make sure you have food on the table for you and your family.
You have shelter. A roof over your head to weather out this nasty health disaster.
Protect your mental health and wellbeing.
Here are 5 ways to make sure you’re going to survive;
1If you have a mortgage broker now is the time to make contact with them if they haven’t already got in touch with you to discuss your home loan options.
If you feel you don’t have someone who you can trust in this area then I’ll drop you the name of a broker who is loyal, trustworthy and has the homeowner’s best interests at the forefront.
A point to note is that I don’t have any affiliation with this company, nor do I receive any kickbacks. I’ve just known them for a very long time and they’ve shared many tips with me to help my clients pay down their home loan debt as fast as possible, all without any strings attached.
2 If you’re not comfortable talking with a mortgage broker then get on the phone with your bank or lending institution and negotiate a deal that sees you freezing your monthly mortgage payments for the next couple of months.
What the bank will do in most cases is hold of taking payments for a short period of time, or they may even negotiate with you just paying interest-only payments.
Once this storm has passed, they will get you making small additional payments on top of your regular mortgage payments, once things go back to the “new normal” and you’re earning an income again.
3 Get in touch with your credit card provider and see what they can do for you to hold off making any monthly credit card payments. There may be something they can do to stop the cash bleed going towards paying your debts while your cash is in short supply.
4 If you’re renting then get on the phone and talk to your landlord to see what they will do to help take the strain of worrying about how you can afford to keep the roof over your head.
Most cases they are going to be in the same situation, worried that if you move out how will they afford to keep up their ongoing mortgage commitments on the property you’re living in. It’ll be up to them to negotiate with the bank to see what they can do on the other side to hold off future mortgage payments until things become a little more financial.
5 Now you’ve made contact with your bank or lending institution, next you have to see where you can find some cash or get some part-time work to make sure you survive during this traumatic time.
With the coronavirus pandemic impacting almost every business, some entrepreneurs are thriving and looking at ways to support their employees during this difficult time.
There are some industries that are still hiring and in fact looking to increase their staffing requirements because they’re in areas where they are in high demand during this time.
Supermarkets are one example as soon as they stack the shelves they are empty again. Some of the areas they are hiring and looking for are packers, bakers, customer service staff – check your supermarket’s website to see what they need.
Fast food deliveries have seen an increase in demand due to self isolation requirements and companies like Uber eats have seen an increase where they are looking for more drivers.
There’s a job board I discovered this week called Jora which is an Australian based search engine for jobs. Unlike traditional job boards, individuals can search through thousands of career opportunities, all sourced from many job sites from around Australia.
They list updates every 24 hours with new job opportunities. The site even breaks it down into job type, salary, location and job titles. Go check out it.
Here’s the link to Jora Australia just click on it and see if there’s something for you.
Other ways to get extra cash is;
You could look around the house to see what’s cluttering your home that you could sell online.
Or if you’re crafty and creative, how about sell your stuff online at sites like Etsy.
What about if you’re a cafe owner who a person who can bake. Why not teach someone how to decorate cupcakes, or another favourite baking item of yours and get paid for it by setting up a class online. People are basically in isolation looking for new creative ways to fill in their time.
You could also look to partaking in online surveys or focus groups and get paid to give your opinion.
Another is to sell your expertise online, whether you’re a tutor, teacher or have an expertise that you could share or teach online and get paid for it.
Why not look at some freelance work at sites like Fiverr, Upwork, Craigslist to name a few. Check out these sites as there may be something you’re good at and get paid for.
Affiliate marketing is another way, if you have a blog or website, you could get paid for advertising someone’s business on your site.
6 Okay next look to see where you can cut all unnecessary costs.
Go through your bank statement and see what you’re spending your money on.
What subscriptions do you have that you can go without for a while that will save you any money big or small?
I recently did this exercise as I often have things I’ve subscribed to that I don’t use any more. So because I hate giving good money away, I cut about 4 subscriptions and put $80 back in my pocket per month.
One of these was to suspend my audible account for the next 90 days as I have enough books in my library to keep me going for a year.
It may not sound like much but saving $50 or $100 will make the difference when you need to put food on the table or keep the roof over your head.
If you’ve got an iPhone go through the settings tab on your phone and check out your apple account to see what subscriptions have slipped through the cracks.
Gym membership is a big one at the moment because you can’t go out so why not suspend or cancel it if you can.
What streaming providers do you need? Do you need everyone that’s on offer at the moment like Foxtel, Netflix, Stan, Disney or even Amazon Prime to name the ones off the top of my head?
Maybe decide on one or two and cancel the rest. Wherever you can save a few dollars do it.
You’ve got to be ruthless and tough. Just as I am sitting here writing this our daughter came in wanting to buy an online game for her iPad.
It may have been only $5 and she said I’ll use my own money. That’s fine but as I said to her do you really need it right now and why not see if you can save that money for a bit longer to can go without for the next month before you decide to shell out your pocket money.
If we can teach our kids now the importance of saving, when a time like this comes up in THEIR working life, they’ll have the skills to knuckle down and not spend on non-essentials.
Now is the time to teach your kids about the value of money and how looking after the cents will amount to huge amounts of dollars later in life.
Look at what you’re spending your money on and see where you can cut down on things.
Sadly, most don’t have 6 – 8 months worth of emergency money so look at ways to get some dollars in the door fast.
You’ll need to make sure you have about 90 days worth of money to see you through.
Your job right now is to get a job if you’re not working and bring in some money to take the pressure off.
This will help keep your spirits high and look after your mental well being and health.
There is nothing more stressful than financial worry and pressure, so do what you can and see if any one of the suggestions I’ve offered above helps you out.
If you need emotional support or looking for more information on how to take the financial pressure off, then join my FB Group where I will be here for anyone needing an ear, as well as, sharing more tips and information.
I look forward to hearing from you.
In the meantime stay safe and healthy.
Reference: Mortgage Broker – Harry Bozin CLICK HERE for more info.
