Paying off a mortgage can be really tiresome. Each month, a part of your income is deducted even before you receive it. You don’t have the chance to truly enjoy the money you have earned. The best way to relieve yourself of this is to pay off the mortgage early.
To paying off your mortgage early requires commitment. You don’t just have the thoughts in your head. You actually take actions to ensure you rid yourself of mortgage debt. There are various ways to pay off your mortgage debt. You need to familiarize yourself with this.
Start Making BiWeekly Payments
A lot of people when taking out a mortgage always make monthly mortgage payments. But this increases the number of years it takes to pay off the loan. Making bi-weekly payments can reduce the number of years by half. This involves making mortgage payments every two weeks.
Before you begin making bi-weekly payments, check with your lender. Some mortgage lenders don’t accept bi-weekly payments. And do but the payment doesn’t always reflect immediately you make the payments.
The way bi-weekly payments work isn’t had to understand. There are 52 weeks in a year. Divided that gives you 26 bi-weekly payments which you have to make. It is the same thing as paying for an extra month for your mortgage. The extra mortgage payment can be added to your principal. It also reduces the interest paid in the long run.
Each Year Make an Extra Payment
Making an extra mortgage payment is a sure way to pay off a mortgage early. Some lenders charge for making extra payments, so discuss with your plans with your lender. Making an extra payment each year save you from paying a large interest on your mortgage. Ensure that your extra mortgage payments are used to pay for the principal only. This will have the desired effect of reducing your interest paid in the long run.
Refinance Your Mortgage to A Short Term Loan
Normal mortgage loans have a 30year repayment period. However, you can request a short-term loan like 20 or 15years. Refinancing your mortgage helps you pay off the mortgage a lot faster. It also has the effect of reducing the mortgage interest rate which you pay on your home loan. Refinancing a loan is especially good if you get a rise in earnings.
Put Your Tax Return into Paying Off Your Mortgage
As a taxpayer, you are entitled to a tax refund at the end of each year. Put this extra money you have into paying off your mortgage. This will help reduce your principal and save you interest charges. Every penny counts when you want to pay off your mortgage before its due date. All efforts will be worth it in the end as you come to a step closer to owning your home.
Throw All Windfalls into Mortgage Payment
Surely in a year, you can have as many as 5 financial windfalls. It could be in form of inheritance; work bonus or money you get from selling the item you no longer use. No matter where the money comes from, throw it at mortgage payments. This not only reduces your principal; it also reduces the interest charge you will pay.