Guide to Paying Off Your Mortgage Faster
Paying off a mortgage can seem like a monumental task, but the key lies in paying it off faster to net substantial interest savings over the life of the loan. Aside from the interest saved, you also get the obvious perk of paying off your mortgage early and removing a huge expense from your monthly budget.
Try some of the tips below, or a combination of them, to stay ahead of the mortgage game.
Refinance into shorter term
Many don’t take into account all the perks that come with refinancing your mortgage. You can pay your loan off sooner, lower your rate, and save hundreds of thousands of dollars in long-term interest savings. Plus, in choosing American Financing, you can refinance your mortgage without resetting your term. So you can be one step closer to achieving your financial goals all while staying on track to pay off your mortgage. You’ll have access to custom loans that are 9, 13, even 18 years long. It’s your term, your choice.
Take a huge step toward truly owning your home by considering a mortgage refinance. Feel free to use our Guide to Refinancing to understand your options, estimated costs, and what preparations are needed to get started.
Set up bi-weekly payments
This is an easy one, simply set up bi-weekly mortgage payments. The trick to the bi-weekly payment method is that there are 52 weeks in a year so you’d be making 26 payments total. If you were to make two payments a month, that would be just 24 payments a year. Just be mindful of scams or special programs from other companies that claim they can set up bi-weekly payments for you for a “small” fee. It shouldn't cost you a dime to make extra payments on your own home loan.
Pay more toward your principal
Paying more toward your principal can be achieved in a variety of ways. Instead of paying for a monthly gym membership that rarely gets used, you could cancel that membership and use that money toward your monthly mortgage payment. If there aren’t other monthly expenses to cut from your budget and reallocate toward your home loan, then use your tax returns toward the principal. Most splurge on material goods, major purchases, vacations, etc. when they could be using their tax returns to pay off their homes faster!
Curious about how much of a difference an extra payment can make on your overall mortgage? Try our extra mortgage payment calculator!
Don’t overextend yourself
While implementing all the methods above is tempting and doable, it might not make the most sense for your specific financial situation. Make sure you don’t get behind on your other bills in the process of conquering your mortgage. If you feel financially strained, then slow down. You can always return to these options when you’re ready. For more direct assistance or to learn more about our refinancing options, don’t hesitate to contact an American Financing mortgage consultant at (800) 910-4055.