A mortgage is a big financial responsibility, and it can feel like it’s taking forever to pay off. If you’re not careful, you could be making payments for 30 years or more. But what if there were ways to pay off your mortgage faster? In this blog post, we’ll explore strategies you can use to pay off your mortgage faster.
These tips will help you to get out of debt sooner, from making extra payments to refinancing.
- Schedule Extra Payments
- Refinance to a Shorter Term Length
- Recast Your Mortgage
- Pay Biweekly
Schedule Extra Payments
If you have extra monthly money, consider making additional payments on your mortgage. Even small extra payments can make a big difference over time. For example, an extra $50 payment each month on a $200,000 30-year mortgage will save you more than $15,000 in interest and pay off your loan more than three years early.
If you get a bonus or other windfall, you may be tempted to spend it. But if you want to get ahead financially, put that money towards your mortgage. One lump sum payment can make a huge dent in your loan balance and save you a ton of interest over the life of the loan.
Refinance to a Shorter Term Length
If you’re looking to pay off your mortgage faster, one option is to refinance to a shorter term length. This will increase your monthly payments, but you’ll pay off the loan in a shorter amount of time. For example, if you have a 30-year mortgage, you could refinance to a 15-year mortgage and pay it off in half the time.
Before you refinance, there are a few things to consider, such as whether it makes financial sense for your situation and if you’ll be able to afford the higher monthly payments. But if you’re looking to get out of debt quicker, refinancing to a shorter term length is one way to do it.
Recast Your Mortgage
This involves making a lump sum payment to your lender, which lowers the principal balance of your loan. This reduces your monthly payments and the overall interest you’ll pay on loan.
Keep a few things in mind if you’re considering recasting your mortgage. First, not all lenders offer this option – so be sure to check with yours to see if it’s available. Additionally, fees may be associated with recasting your mortgage, so be sure to factor that into your decision. Finally, while recasting can help you pay off your mortgage faster, it won’t necessarily save your money in interest costs – so be sure to do the math to see if it makes sense for you financially.
Pay Biweekly
To make bi-weekly or extra payments towards your mortgage. By paying a little extra each month, you’ll be able to reduce the amount of interest you pay over the life of the loan and pay off your mortgage faster.
