Paying off your mortgage early will help you in the long run. In fact, paying off early is in. Mortgage borrowers are finding their ways to minimize their mortgage costs. Though refinancing can help them pay lower every month, it will just prolong the burden of paying debts. When you come to think of it, applying for a long term loan will increase the total amount that you have to pay for your property.
Therefore, it is better to settle your debts on time or even ahead of time. Here are five sure fire tips on how to pay off your mortgage early:
1. Pay More
Start assessing your mortgage loan rate and play with a mortgage calculator. Try to find out how paying a little extra every month can shorten the length of your loan. In paying a little more principal, you will get a bonus. Therefore, the more extra payment you make, the more principal you get. Later on, you can use these principals to cover your interest expense.
2. Switch to Biweekly Payments
Paying mortgage on a biweekly basis will give you an advantage because there are months with more than four weeks. Therefore, you have to pay half for the extra week, making it easier for you to pay for your debt completely.
Assess if your bank can set up a biweekly payment plan. Some banks switch plans for free while others charge. Also, you can ask the bank to credit all extra payments to the principal so you can save on interest expense.
3. Refinance With A Short Term Mortgage
Refinancing can help you to pay off your mortgage early if you will get a shorter term mortgage. You can refinance for ten, fifteen, or twenty years depending on your financial capacity. The most common refinance mortgage is a fifteen year plan. You may pay a little higher compared to your normal rate but not as high as you think.
4. Pay Next Month’s Principal This Month
Instead of paying for this month’s principal, settle next month’s payment as well. You may not be sure about its exact price but you can just double your pay for this month. That way, it will be easier. Doing so, you put your mortgage payment into hyperdrive. When the principal payment increases, you’ll pay down for your mortgage faster.
5. Haphazard Approach
If you can’t think of another way, try the hap hazard approach. This simply means that if there’s extra money coming in, send it over to pay for your mortgage.
These are effective methods that you can do to speed up your mortgage payment. Always make sure that you are aware on mortgage rates, banks policies, and mortgage loan systems so you can think a better plan ahead.
www.omnifundgroup.com
