Homeownership is an important milestone for many Americans, and having a mortgage payment to make each month can feel like a weight on your shoulders. However, paying off your mortgage early can help provide you with financial stability and eliminate interest payments that would otherwise keep adding up over time. Here are some ways that you can pay off your mortgage more rapidly.
Refinancing Your Mortgage
If you’re a homeowner, a refinance is a great way to reduce the amount you pay toward interest while increasing the amount going to the principal. You can also take advantage of rising home prices by decreasing your loan term and increasing your monthly payment.
Making Additional Payments
Making extra payments toward your mortgage will save you money in the long run, and it’s a great way to meet any short-term financial goal. When it comes to paying off your home loan early, making extra payments can be a wise way to save money on interest and get out of debt faster. You don’t have to wait for an annual payment plan from your lender, just write a check for whatever amount you want, and mail it with your monthly payment to your lender.
Every Year, Make an Extra Mortgage Payment
Making one extra mortgage payment yearly can significantly reduce the length of the loan. It simply involves creating an additional payment each year on top of your regular payments.
Give the Dollar-A-Month Plan a Shot
You can pay off your mortgage in record time if you gradually increase the monthly payment by one dollar each month, starting with the first payment after you get your loan. When you are ready to buy a house, use this plan so you can build up equity faster.
Make Use of Income that Is Unexpected
Paying off your mortgage quickly requires you to make one small change yet produces significant results. Take advantage of any unexpected income by sending it straight to the people who loaned it to you. This includes any holiday bonuses, tax returns, or credit card rewards. Using this extra money won’t cut into your regular monthly budget.