Chances are your mortgage is one of, if not the, largest debts you owe. Many people look at that and accept that because it’s such a large debt, they’ll be paying on it for years. While I agree, our mortgage payment is probably one of the ones that will be with us the longest, I also understand there are a variety of ways that we can work toward paying off our mortgage faster. If you want to shorten the length of your loan and pay off your mortgage faster, consider these tips.
1. Make Bi-Weekly Payments
Most mortgage companies offer this payment option, so be sure to ask yours. By making bi-weekly payments, or one payment every two weeks, you end up making one extra mortgage payment a year – a practice that can share upwards of 4 years off of your payment term.
2. Increase Your Payment
Whether you just received a bonus, paid off another debt, or just realized you could afford a little more, add a little extra to your mortgage payment. Even if it’s just $15 of $20 a month, the extra will go a long way toward paying down your loan faster.
3. Make An Extra Payment
Remember that yearly bonus or even your tax refund? Use those types of extra income to make an extra payment as frequently as you can. By making an extra payment even just once a quarter, you could save yourself $65,000 and pay off your home nearly 11 years earlier than projected.
4. Refinance or Act Like You Did
Refinancing can be a great option if you can do so for a shorter term and lower interest rate, but if you’re already satisfied with your interest rate, simply act like you’ve refinanced for a shorter term mortgage. Calculate the amount per month you’d owe if your term was shortened and submit the equivalent payment each month. You won’t have to go through the process of proving you can afford the extra payment, and you’ll be in control instead of the bank.
You don’t have to be stuck with a mortgage that will haunt you for years to come. Consider these suggestions and figure out additional ways you can make even small changes to contribute more to your mortgage each month. This is one payment that every little bit makes a big difference. You can pay off your mortgage sooner than its term, and these ideas can help!