Paying off your mortgage is extremely beneficial for many different reasons. Not only will it improve your credit and allow you to possibly take out a second loan, but it will also give you the freedom of living in a home you no longer have to make payments on. And in the article below, we will list out the top five ways of doing this. So, if you’re getting sick and tired of making your mortgage payments, and would like some extra freedom month to month, be sure to keep on reading!
1. Make An Extra Payment On Your Home Each Quarter
In addition to making you look great to creditors, extra quarterly payments can also help pay off your mortgage years sooner than you normally would. In fact, in some cases, home owners have paid off their mortgages more than 10 years faster by doing this. Apparently extra quarterly payments add up quickly. So, if you’re unable to pay extra each month, be sure to try out this fool proof strategy!
2. Make Sure The Home You Buy Fits Your Budget/Downsize If Needed
Though buying a home you can afford should be something that is “common knowledge”, many people fail to do it. In fact, recent surveys have shown that an increasingly high amount of U.S. citizens are buying homes well out of their price range. This of course leads to failed mortgage payments, bad credit scores, and a whole lot of stress/frustration.
If you are in a home you can’t easily afford, then why not downsize? It may not be preferred, especially if you have gotten used to the current size of your unaffordable home, but it certainly makes the most financial sense, and is fortunately very easy to do!
3. Re-Finance Into A Shorter Term Loan
Re-financing serves as yet another helpful tip that not too many people think of when looking to pay off their mortgage sooner. This tip is mainly for those who have little to no difficulty making their current payments. This is because by re-financing your mortgage into a shorter term loan, you make larger payments over a shorter amount of time. So, if you are not in a financial crunch, and just preferred not to be bothered by needing to remember your payments, this is certainly a viable, and beneficial option for you.
4. Make More Principal Payments, Even If You Don’t Have To
Principal payments are very important when it comes to your mortgage, and by paying more than you have to on these payments, the length of your mortgage can benefit greatly. Fortunately, there are no penalties for paying more principal amount than you have to, and by doing so often, your credit rating will soar. To do this, simply tell your mortgage lender to put the extra money you pay towards the principal amount. This will also help with your interest charges too. This is especially useful for those with an odd number payment. For example, if your payment each month is $1,026, just round up to $1,050, and get ahead of the game.
5. Make Bi-Weekly Payments Instead Of Monthly Payments
Much like the re-financing option listed above, bi-weekly payments are great for those who can afford to pay extra. As you may have guessed, since payments will be made twice as often in this scenario, your mortgage is paid off in roughly half the time. Or, another bi-weekly payment option would be making half of the normal payment amount every two weeks, which also helps to pay it off quickly. Ultimately, whether you choose to pay more or the same, as long as your payments are made bi-weekly, you should be well on your way to a quickly paid off mortgage!