Nobody wants to be in debt. Debt causes stress and can make your life miserable. Buying a home involves a large sum of money, and paying for your home in cash these days is next to impossible. Paying off your mortgage early can give you peace of mind and relieve you of your stress. Mortgages should be taken seriously and paid within a stipulated time. Failing to pay your mortgage can lead to foreclosure. It can negatively impact you and your family members. To pay off your mortgage early, you need to know what you should be doing. Paying off your mortgage early can help you save on the interest.
How to Pay Off Your Mortgage Early
Below is valuable information that will help educate you on how to pay off your mortgage early.
1. Refinance to a Shorter Loan Term
Let’s say you have a mortgage term of 30-years. Refinancing it to 15-years will help you complete the loan a lot faster, and you’ll also pay a lot less interest. You’ll probably get a better interest rate with a 15-year loan completion. Calculating with a mortgage calculator will help you to know how much you would have to pay for a 15-year refinance. If the monthly payment for a 15-year refinance is more than you can afford, consider a 20-year loan instead.
2. Make Extra Principal Payment
Always pay an increased amount as principal only for your monthly payment, as an extra payment. Most lenders will allow you for that option. Paying down a little more as extra principal can save you on the interest charges and enable you to come out of the loan before the actual term. Consider sending a little extra each month as an extra principal payment.
3. Make Bi-Weekly Payment
Instead of making a single monthly payment, make a half-sized payment once every two weeks. This will result in thirteen full-size mortgage payments in a year instead of twelve. You’ll be making an extra mortgage payment each year. It will help you to save on the interest and allow you to pay off the loan early.
4. Invest Unexpected Money into Your Mortgage
Received a tax refund? If you use that money for an extra mortgage payment, you’ll soon reach a time when you’ll pay off your house completely. Your unexpected money can come as a bonus from work or a gift amount from your relatives. Utilizing that money for a monthly payment will help reduce the mortgage term.
Are you looking for mortgage companies in Massachusetts to help you with refinancing? Drew Mortgage Associates, Inc. can help! Drew Mortgage Associates, Inc. is a Boston mortgage lender that can help refinance your mortgage to a lower rate or reduced term that best suits your financial goals. Our home loan officers are highly trained professionals that can help identify the best refinance program that fits your financial situation. What are you waiting for? Call Drew Mortgage Associates, Inc. today!