Paying off your mortgage early is definitely ideal because you will save a significant amount on interest payments and you will own your home outright more quickly. Doing this allows you to save money for other financial investments in the future, such as your child's college education, retirement, and more. To get a jump start, you should know these three ways to go about paying off your mortgage early:
Make Additional Payments:
When you pay your mortgage every month, it's good to get in the habit of paying a bit more than the minimum owed. Telling yourself that you owe higher than what you actually owe is a good way to prepare for your payment each month. You should also make additional payments if you have received a bonus from work. You can even make additional payments by paying half your mortgage every 2 weeks because this amounts to two extra payments per year. Doing this can cut the amount you owe in interest on your home and you will own your home outright much sooner than was originally intended.
Refinancing your home is a good way to save on interest costs and allows you to make even higher payments now that you are saving on the interest owed. The best time to refinance would be when you are promoted in your job, making more money, and have better credit than you did when you first applied for the home loan. You should also attempt to refinance for a 15-year mortgage instead of a 30-year mortgage if you can and if a 30-year mortgage is what you currently have. You will save even more in interest and you will pay off your home sooner.
This is the most dramatic option of all, but if you no longer need the large home that you live in, you can be out of debt quickly by selling your larger home and purchasing a home that is cheaper and smaller. There is even a chance that you can sell your large home for enough money that you are able to pay cash for your new, smaller home. Doing this ensures that you won't have a mortgage to deal with at all.
Doing these three things to pay off your mortgage early is the best way to ensure that you are out of debt as quickly as possible and able to save more money each month for your future. For more information, contact a company like Dominion Lending Centres HT Mortgage Group.
A few years ago, I found myself in a tough spot. My sister had passed away, and I had lent a lot of money to my parents to cover funeral expenses. Also, I had taken off a lot of time from work, which was putting a lot of stress on my finances. Fortunately, a friend of mine told me about a place that issues fair loans, and so I went in to talk with a representative. However, I was nervous about agreeing to unfamiliar loan terms. I spent a lot of time researching financial options, and this blog is all about my experience. Read here to learn more about loans and financing, so that you can understand terminology.