How to Pay Off Your Mortgage Quickly
By If you have a 30-year mortgage loan, it can seem like there’s no end to your monthly payments. But, you can cut the time it takes to repay your mortgage by using certain strategies, many of which actually don’t require you to spend a ton of extra money. Here’s what you can do to repay your mortgage quickly.
Pay Twice Every Month
Rather than making a single monthly payment, it’s a good idea to split your payment in half and pay every two weeks. You’ll find that you would have made the equivalent of a total of 13 monthly payments by the end of the year if you do this. However, keep in mind that not all lenders will accept bi-weekly payments, so check with your lender if they have any terms regarding this.
Budget for One Extra Payment Every Year
If you don’t want to go through the hassle of making two payments every month or if your lender doesn’t allow bi-weekly payments, it’s a good idea to just keep aside some money so you can make an additional lump sum payment every year.
Make an Extra Payment Every Month
If making a lump sum payment at the end of the year towards your mortgage is not something you can afford, consider paying a little extra every month. This doesn’t have to be a lot. Say, for instance, your mortgage amount comes to 1,765 a month, you could round it up and pay 1,800, or better yet, you could pay $100 extra every month.
Refinance Your Mortgage
If your interest rate on your current loan is not the best, you can consider refinancing your mortgage to a loan with a lower interest rate. Of course, for this to work, your credit score should have improved from what it was at the time of purchasing your home and getting your current mortgage. When you refinance your loan, make sure that the lifetime interest charge is lower than what you would have had to pay on your current loan. But, before you refinance, ensure that you check if your current lender has a prepayment penalty.
These tips can help you pay off your mortgage loan a lot faster. However, make sure to check your lender’s terms and conditions regarding repayments well in advance.