Whether or not you have survived the foreclosure crisis, paying off a mortgage early has become a popular thing among homeowners. Owning a home without owing any further dollar signs on it comes with many benefits. But in order to do that as quickly as possible, there are some tips and options one can follow for paying off their mortgage early.
This is one of the most surefire ways to start seeing your mortgage debt dwindle down. Adding just a little bit of extra payment to your principal here and there can shorten the length of your loan. The lower your principal gets, the more every payment from then on is applied to principal, and less goes to cover interest expense. If you can’t put an extra $100 on your payments each month, try rounding up your payments (i.e. instead of $564, round up to $600). You’ll be surprised how quickly the small amounts add up.
15-year mortgages are pretty common, and the longer your loan is the higher your payments will be, but interest rates may not be as high. Consider refinancing to a shorter-term loan, and commit to the higher payment to get the mortgage paid off faster. If you want to get the effect of a shorter-term mortgage, take out a 30-year loan but pay it off as if it were a 15-year loan.
You could also refinance to a lower interest rate. This is especially possible if you plan on staying in your home for at least 3 more years and your mortgage is at least $100,000.
Make a lump-sum payment
Consider applying some of your extra cash toward your principal balance, such as a tax refund, inheritance, or other stash of cash you have recently received. This method doesn’t require you to pay an increased monthly payment, but instead puts a nice dent in your payments for the time being when you have the extra cash. Before doing so, call your lender to verify that your mortgage loan doesn’t include any prepayment penalties so you can avoid being hit with any fees.
There are many other options to repaying your mortgage quickly so you can finally own your home outright. Visithttp://www.jandbhousesolutions.com/ or call us today at 858-633-8146 for a FREE no obligation quote on your house or property.