5 Ways To Pay Off Your Mortgage Early

Your mortgage term might be fixed, but it doesn’t have to control when you’ll be mortgage-free. Let me show you how to speed up the process.

A lot can happen in 25 years. Job change, kids become adults and life goals are accomplished and reset. Change during such a lengthy period is inevitable. But if you’re a homeowner, there’s one thing that won’t change: Your obligation to make a monthly mortgage payment.

 A loan term doesn’t have to dictate when you free yourself from this financial commitment. There are a few ways to cut the ties early while lowering the total amount paid in the process. Follow these recommendations, to pay off your mortgage early.

1. Refinance into a 15-year mortgage

Cutting your loan term in half is a big financial step, but the benefits are substantial. Not only will you shorten the payoff time, but you’ll also be rewarded with a lower rate and pay significantly less in interest over the life of the loan.
The key here is determining whether you can shoulder a larger monthly cost that comes with a 15-year mortgage. If you’re not completely confident in your ability to commit to a higher monthly payment, challenge yourself to make payments you would be making if you had locked into a 15 -year mortgage.Then, if financial circumstances change, you still have the flexibility to return to a lower monthly payment.

 

2. Refinance into a lower rate but keep payments the same

The benefits of refinancing your loan but sticking to the same payments are twofold: You will pay less in interest over the life of the loan and create a shorter path to mortgage freedom. Plus, it’s not as drastic as jumping from a 25-year mortgage to a 15-year mortgage.Closing costs for refinancing are generally lower than if you were to purchase a new home, but they’re still an added expense. Your new interest rate should be low enough to negate the cost of refinancing, or you should be planning on staying put long enough to reap the benefits of a smaller rate. Use Mortgagesbydallas Refinance calculator to see if this is a good option for you.  //www.mortgagesbydallas.com/Mortgage-Calculators/Refinance-Calculator

3.Tax returns, bonus checks, and inheritance payments

Tax returns, bonus checks, and inheritance payments present the opportunity to pay off a chunk of your mortgage without feeling the pain in your monthly budget. This could mean thousands of additional dollars chipping away at this massive financial responsibility each year. Sometimes your money could be better spent elsewhere like paying off high-interest debt but if wiping out your mortgage early is a priority, this is a great place to start.

4. Pay Extra On Your Mortgage Payments

Divide your payment by 12 and add that amount to each monthly payment or pay half of your payment every two weeks, also known as bi-weekly payments. You’ll make one extra payment each year, saving you thousands and shaving years off your mortgage. Make an extra house payment each quarter, and you’ll save thousands in interest and pay off your loan years early.

5. Downsizing 

Downsizing your home could be a big step, but if you’re set on getting rid of your mortgage, consider selling your larger home and using the profits to buy a smaller, less expensive home. With the profits from selling your bigger home, you may be able to pay all cash for your new home, but even if you have to get a small mortgage, you’ve succeeded in reducing your debt. Now your goal is to get rid of that debt as quickly as possible. The smaller the balance, the quicker you can make it happen.

Pick the best option that suits your needs. And if you have any questions contact Dallas to help you pay off your mortgage faster. 

 





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