Strategies to Pay Off Your Mortgage Sooner
Acquiring a mortgage loan is one challenge but keeping up with your mortgage payments is another. If you are currently in the middle of your mortgage repayment, congratulations! You are on your way to owning a house and you have definitely made the right investment. Now all you need to do is complete your repayment to ensure that you won’t have any problem with your mortgage.
It is no secret that paying off your mortgage early will enable you to save money. Since monthly interest rate charges can be steep, you will be doing yourself a big favor if you will finish your mortgage payment sooner rather than later. So if you are delaying your mortgage by passing off your monthly payment from time to time, don’t. On this post, let’s talk about strategies that you can do so you can pay off your mortgage at the soonest possible time:
Go Bi-Weekly.
If you have a 30-year mortgage, you can slash off a couple of years from your repayment period if you choose the bi-weekly mode of payment, instead of the traditionally monthly plan. In a year, you will be making 26 payments compared to just 13 monthly payments. Inquire if your mortgage lender offers this repayment plan, and if not, you can try to request for it.
Make an extra payment.
If you choose the monthly mode of payment, you can still cut the time of your repayment period by making one extra payment each year. Why not use a portion of your 13th month pay at the end of the year or save up a little each month to pay down your mortgage faster? {Also read10 Tips for Better Home Loan Management}
Refinance your loan.
If you obtained your mortgage while you still have a low credit score, it is likely that you are paying a much higher rate. Check your credit report and see if you have made a significant progress. Since paying your monthly loan payments on time is a huge factor, your credit score should have improved by now that it was when you first signed up for your home loan. Refinancing will enable you to get a much lower interest rate or switch to a shorter repayment period, so if you still have more than five years to pay down your mortgage, this is an option you should consider.
Cut back the period of repayment.
Evaluate your financial situation and calculate your expenses. If you can afford the monthly loan payments for a 15-year repayment term, you may consider making that transition from a 30-year loan term. However, you need to be certain that you can keep up with the new monthly loan fees until the end of your loan’s term. Furthermore, you should always choose a fixed-rate loan over a variable-rate loan to protect yourself against balloon payments.{Also read Top Avoidable Home Refinancing Mistakes}
Don’t delay.
Be conscious about your due date of payment. If you’re having trouble remembering your due dates, you can arrange for automatic payment with your bank to ensure that you will not miss a single month of your mortgage payment.
