How To Pay Off A Home Mortgage Early
The majority of home owners would love know how to pay off their home mortgage early, but never take the time to learn how. Paying off a home early requires some work and sacrifice, but it is worth it in the end. Here is how you can pay off your home faster than you every thought possible.
- See if you can refinance your mortgage to shorten the term of your loan. This is one of the easiest ways to pay off your home mortgage early. Though refinancing takes some time, it forces you to pay off your home in the set period of time. Just make sure you will not be stretching yourself too thin when the mortgage payments go up.
- Make biweekly payments instead of one monthly payment. Sending in half of your mortgage payment twice a month is an easy way to pay off your home early. The reason this works is that it lowers your principle balance faster and so you pay less on interest. The longer you send in biweekly payments, the less interest you will pay and the faster your mortgage will be paid off. Not only is it easy, but it can literally shave years off the length of your mortgage.
- Pay extra toward your loan every month. Find extra money in your current budget to pay toward your principle. Even as little as an extra $100 a month can make a huge difference. Let’s say you have a $100,000 30 year mortgage at 7% interest. Putting just $100 extra every month will help you pay off your mortgage over nine years early. So find that extra money and get your mortgage paid off fast.
- Apply your tax rebate toward your principle. If you are someone who gets a tax refund every year, use it to pay off your mortgage. Using the same scenario above, if you applied $3000 once a year from your tax refund toward your mortgage for the next five years; you would pay off your home nine years and four months early. Do you really want to use it for a vacation now?
- Apply any windfalls to pay off your mortgage early. Whenever you receive a bonus at work or an unexpected raise, put that money toward paying off your mortgage. These windfalls are something you were not expecting, so you will not miss them and they will make a large dent in your mortgage over the long term.
- Continue these steps until your mortgage is gone. Now that you have these steps down, keep following them until your mortgage is completely paid off. Stay motivated and you will have that house paid off sooner than you ever thought possible.