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How can homeowners learn to reduce their mortgage loan monthly instalment?

How can homeowners learn to reduce their mortgage loan monthly instalment?
Ever wonder if there are any alternatives you can consider to reduce your monthly instalment towards your mortgage loan? Or why should you be even doing it? Easy breezy, you are just 3 steps away from it!
Throughout the years of helping clients manage their mortgage loan portfolios, Our Mortgage Gurus realised that there are still a large group out there, not reached out to and unaware they do have the choice of making money works for them and therefore nonchalant on prioritizing their mortgage loan over other expenses. Saving on the mortgage loan monthly instalment allows all of us to continue to indulge in our secret simple pleasures such as online shopping, or traveling.
Let bSavv dissect the process for you and frequently asked questions that kept you bizarre and deter you from making the next step forward, like e.g. what kind of interest rates are you paying? How Long is your loan period?
3 simple steps in how to be savvy!
Review the existing mortgage loan interest rate you are paying
Do you feel that your interest rate is acceptable? Is paying an interest rate of 2% acceptable? Every home owners should practice reviewing their existing mortgage loan interest rate every 2 - 3 years, by refinancing or repricing. You will be surprised that the interest can be very substantial.
For example:
A loan outstanding of $500,00 with an interest rate of 2% could be paying about $1,900 a month. If you were to reduce the interest rate to 1.3% - 1.4%, you could be paying only $1,700 a month.
Where did the difference go to? In layman, you could be saving $200 but in actual fact you are saving about $300 a month. How did we get this figure? Well, Lesser interest paid, more of your monthly instalment will be used to pay down the loan principle which derive the total nett savings of close to $3,600 a year.
Is that all? No, to those homeowners who use their CPF to service the monthly instalment will get to accumulate their CPF due to the reduction of monthly instalment. With that, it leaves more CPF behind in your Ordinary Account to gain the interest rate of 2.5%.
Why pay additional interest to the banks when your money could be saved up for better purpose? With a total great savings of $3,600, give yourself a pat on the shoulder for a job well done and you certainly deserve the long await holiday trip!
Extend your loan period
Is that even possible? Wouldn’t that be conflicting with the regulation from MAS? These are many of our clients first reaction whenever proposals of such pop-up. It can be done in the scenario if you did not take up the maximum tenure period initially. For e.g.: a family took up a tenure period of 20 years when their condominium was first purchased in 2010. While they are in the midst of refinancing, they can stretch up the tenure period to 27 years or which will greatly help them to manage their financials. This will help you to reduce your monthly repayment but of course you will be paying slightly more interest since the loan period has been extended. 
Make partial repayment to reduce your outstanding loan
Funds for investments check. Funds for emergency check. Funds for regular savings check. You still have that extra funds? Great! You can consider partially repay your loan if it is out of the lock-in period or the loan offer has a flexibility to allow you to make partial repayment. If you have funds of $50,000 and by prepaying it, your loan outstanding will decrease from $500,000 to $450,000. This will reduce your monthly instalment about $200 every month
We leave you still a little light headed? Leave all these technical calculations to our Mortgage Gurus! We will get you the lowest interest rates among all banks in Singapore and best of all we do all the necessary legwork! Click here to get in touch with us today!

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