Home Mortgage Reduction - One Infallible Tip to Reduce Your Housing Loan Interest Rates

"A mighty ocean is made up of little drops of water." This is a wise saying that is worthy of consideration for anyone who is saddled with any form of mortgage or any loan for that matter.

The housing loan interest rates are the largest amount of money that most people will ever have to borrow and paying it off is a dream which many share.

Paying off your housing loan interest rates, however, requires some sacrifice. The sacrifice is, nevertheless, worth making if one considers the attendant advantages. I concede, though, that such sacrifices may not be easy to make. But the very fact that these sacrifices are difficult is what actually qualifies them as sacrifices. If they were easy, then they would not be sacrifices. Every rational person knows that to endure some hardship or discomfort today in order to have a future that is financially safe and secure is a worthy enterprise.

How does this apply to your housing loan?

Well, the connection is this fact that cutting your home mortgage or your home mortgage interest comes with some discomfort today. This discomfort, however, translates to a huge gain in the future if endured. When it comes to cutting your home loan, the truth is that if you put in a little but consistent effort, you could achieve a significant cut and save big. Your consistent effort, however little, will result into savings which can be used to slash the size of your mortgage and rewarding your effort.

Somewhat less apparent is that your personal sacrifice in this regard will see more of your monthly repayment going into actually reducing the amount you owe rather than being consumed in paying interest to your lender. This will accelerate your debt reduction as less and less of your regular repayments are swallowed up by interest. The end result is that your housing loan interest rates is paid off sooner and significant savings are made in the form of interest you have not had to pay.

Now, let us see some figures to buttress the foregoing point. Consider the case of a person with a $250,000 mortgage with an interest rate of 7.0%being paid monthly over 30 years. This person will have to pay $1,660 every month over a period of 30 years. This will translate to a total repayment of approximately $599,000 at the end of the mortgage term.

Suppose this person decided to make a little more sacrifice every month by adding an extra $240 to the monthly repayment thereby making a monthly repayment of $1,900 instead of $1,660. This person would end up paying a total of #477,80 by the time the loan is paid off. That is a whooping net saving of $121,000. Think of what this saving can do in the life of any person!

Wait a minute, but this person has also slashed the mortgage term from 30 years to less than 21 years. Is this not great?! This person is certainly a winner or what do you think? So, go and do likewise.

Article Source: http://blogs.rediff.com/besthomeloanblog/2016/08/03/home-mortgage-reduction-one-infallible-tip-to-reduce-your-housing-loan-interest-rates/