During the decade before we acquired our first home loan we enjoyed a less financially committed life: renting in apartments, going out, and travelling. We were renting a one-bedroom apartment when we welcomed into our life our first beautiful baby.
Living in a one-bedroom apartment with a baby, we became very eager very quickly to find more room; and decided to commit to and purchase our first home. In June 2011 we began making repayments on our first home loan.
Whilst our home loan repayments began in 2011, our home loan journey commenced well before this time when I started to research loans. We didn’t want to pay hundreds of thousands of dollars in interest—we wanted to pay our property off as fast as possible—and instead, save hundreds of thousands of dollars.
After sharing what we were doing with friends, I realised that this kind of thinking and number crunching didn’t come naturally for everyone. A lot of people don’t even think that it’s possible.
But if you have a regular income and can get a home loan; then you can pay your home loan off faster too.
And when you pay your home loan off faster, you can set yourself up in life. And why not? Nobody else is going to do it for you.
You don’t have to be good at math to be able to save hundreds of thousands of dollars on your home loan; you just need the right tools and a little know-how.
The book gives you access to both.
The secret
Now, we were not high-income earners, but we did it.
We had one average full-time wage, one off-and-on casual wage, and we had two young children.
And how did we do it?
We borrowed what we could repay in five years. We purchased a property that was within our means to pay off within five years.
And it’s as easy as that! That’s really our secret!
Ok, so there was a bit of prep work that went into planning all this, and I’ll share this all with you; but that’s basically what it boils down to.
And if there’s one thing to take-away from this book, this is it: purchase within your means, whatever your situation.
We purchased a property that we knew we could repay within five years with the income we had. We worked out how much we could repay every week and we worked out how much we could borrow to be able to pay it off with what we could afford. And we stuck with that amount when purchasing. We bought within our means so that we could pay it off in five years.
Don’t worry, I know; house prices are expensive. You can still make great savings paying your home loan off in 7, 10 or 15 years; it doesn’t have to be in 5 years.
I’ll go through each step in detail on how you can pay your home loan off faster too. There will be a little bit of calculating involved, but you don’t have to be a math guru!
It all starts with turning your home loan thinking upside down.
I call this ‘reverse home loan thinking’ (which I’ll talk about soon), and I developed the Reverse Home Loan Calculator (free on this website payitinfive.com) to help you do just that (don’t worry, it’s easy to use).
I personally like the downloadable version and I keep this handy on my computer so I can save what I’ve done. You can get the downloadable version on our gifts page, just use password 1234 to access payitinfive.com/gifts,
Five easy steps
With Pay it in 5, it’s all about 5; five years—five steps. I created 5 steps so that it’s easy to do and remember.
I started documenting what we did in the book because I knew that with these five steps we could do it—I wanted to share this so that you too can save thousands, if not hundreds of thousands of dollars on your home loan.
It took me over ten years to write this book and it contains everything we learned along the way; including everything we learned buying our second property.
Now I’m passing that knowledge on to you.
This book encompasses the five steps to paying your home loan off in five years. The information contained within this book can help you learn how to pay your home loan off faster whether you are about to take out a home loan, or already have one.
The five steps are:
Step 1. Plan
It is easy to fall in love with a house and lose sight of the bigger picture when you are looking for a property. This step helps you get some perspective and to think about your home loan in reverse.
Step 2. Calculate
Thinking about calculating home loan costs can be overwhelming. The good news is, you don’t have to be a math guru to work it out. This chapter shows you how you can pay your home loan off faster.
Step 3. Borrow
Buying a property doesn’t happen every day. Step 3 equips you with the knowledge and questions so you’re ready to borrow.
Step 4. Buy
There are so many obstacles to buying a house. This step helps you to navigate the world of buying. Learn from our mistakes and our successes.
Step 5. Manage
After you buy a property, it can be easy to get caught up in the home loan and forget about your original plan. Step 5 helps you stay on track so you can achieve your ultimate home loan goal.
I didn’t write this book for it to sit on a shelf, or worse, to be lost in someone’s digital labyrinth.
I wrote this book to share how we did it in five easy steps and how you can do it too.
As a thank you for reading the book, I have a free gift for you: I have developed tools and calculators that have helped us to pay it in 5 and are free for you to use. The password is 1234 to access payitinfive.com/gifts, the tools that complement the book. You’re welcome.
Use this book in conjunction with those resources to work out the best plan for your situation. And if you’d like coaching on how you can do it too, book us in for a chat.
I get a feeling of satisfaction when I create something that saves me loads of time. I hope these resources save you loads of time—and money—too.
And the best thing is, all the principles in this book can be used at any time during your home loan journey. I continually return to this book to remind myself how we did it before and of the underlying principles, and yet I wrote the book!
Maybe you are a first home buyer, maybe you already have a home loan, maybe you want to buy a holiday house to retire in; whatever your situation, the principles in this book can help you get there faster.
This book shares how you can do the same. You will be able to create a plan to pay it off faster, create healthy money habits (and get rid of bad ones), to prepare for meeting with lenders before you get a loan (you are going to love my list of 30 questions you can ask your lender—in store for you a little later; all tried and tested), and how to see your home loan plan through.
I’m passing the secret on to you so you can do it too.
When we did finally purchase our first home we not only stayed on track, but we were able to then buy a house in our favourite location.
And in the meantime, I kept plugging away at this book, little by little (well, it did take me over ten years!), updating it with any new information from both of our purchases so I could share everything you need to be able to do the same.
Why Five Years?
While I wrote this book to show that it can be done in five years, it does not have to be done in five years, you can take longer. In some situations it may not even be possible to pay your home loan off in five years (e.g., if you already have a loan that is bigger than it is possible to pay in five years). Or maybe you want to buy a bigger house.
Our second property was not one we paid off in five years. Our situation was different. For us, we wanted to live in our favourite location. In the end we bought because the interest we would pay on buying the property was cheaper than renting somewhere else, so it made more sense to buy. Then I developed another plan to pay our home loan off faster, using the same principles, but this time with a slightly longer time frame than five years.
You may wish to pay your loan off in 7, 10, or 15 years. Either way you save money; and lots of it.
These five easy steps helped us to reach our home loan goals faster and can help you reach yours faster too. Whatever your situation, whatever stage you are at in your home loan journey, you can get there faster.
Use the book as a guide and take from it what is relevant for you and your situation.
As you read along, think about the big takeaways for your situation, highlight important areas for you in the book and make notes that you can come back to.
Don’t be afraid to consult the book again and again and again. Even though I wrote the book, it is still too much for me to remember when I need it again. I still come back to this book as a reminder of what to do.
I would love to hear about how this book helps you. Tag #payitin5 on social media to share your journey with me, and drop me a message via payitinfive.com
Happy house hunting and best wishes on you home loan journey.