If you have been fortunate enough to receive extra income, one of the things you can do is to pay your mortgage loan in advance.  Find out the reasons why this decision is beneficial to your finances in the following points:

Improve cash flow

Paying your Mortgage Loan up-front implies that you will no longer have to cover the dividend monthly, so you can have that part of your monthly salary for other expenses.

In other words, you will have greater economic freedom and you can be free of worries lest you have to face a considerable payment periodically. Remember that the delay in the payment of the dividend also brings with it the default interest and collection expenses.

Saves interest payment

On the other hand, since the financial institution charges you some interest during the term of the loan, paying the money in advance will save this burden. To be short, the faster you cancel the loan, the less you will pay.

Increase assets

Instead of spending the extra income, you use it to amortize the mortgage; that means, you will be increasing your wealth by reducing a debt and releasing a fixed asset of charges. By eliminating such an important debt, you will find a more favorable credit profile.

Thus, it will be easier to get another loan in case you need it because you have already demonstrated your ability to pay your debts. But these advantages do not come only if you pay all the credit in one go.

In conclusion, advancing the payment of a Mortgage Loan offers you many advantages, in terms of saving and improving cash flow and your equity situation.

By: Shailaja K