Paying Off Your Mortgage
Faster
Paying off your mortgage
is one of the biggest financial goals of most homeowners, and retiring
debt-free can certainly give your golden years a greater sense of financial
freedom and stability. Whether you're
nearing retirement age or are just looking to reduce your largest debt load
more quickly, here are some great tips for paying off your mortgage faster!
Principal Versus Interest
Essentially, to pay off
your mortgage you have to reduce the principal owing on your property. There are really two ways you can do this
without dramatically reducing your monthly budget.
Increase Your Monthly
Payments
Even increasing your
monthly payments by a small amount can take years off the life of your
mortgage. You can also choose an
accelerated plan whereby you can make weekly or biweekly payments rather than
monthly. This will allow you to make a
few extra payments each year. Combining
these efforts can really have a surprising effect on the principal of your
mortgage over a short period of time.
There are a number of free online calculators that can help you figure
out the exact numbers for your particular situation.
Reduce Your Interest Rate
If increasing your monthly
payments is not an option, you can still pay off your mortgage faster by
refinancing your mortgage to negotiate a lower rate. Keep your eye on the financial markets to
gauge the best time to make this move, and seek out the advice of a Premier Beach Realty Agent or
financial advisor to confirm that this is a viable option for your current
financial situation. If you have a good
history of payment and an excellent credit score, finding a lender shouldn't be
a problem.
Make A Lump Sum Payment On
Your Mortgage
Another way you can
decrease your mortgage principal and pay off your mortgage faster is by making
a large lump sum payment. If you have
come into extra money, have received a large income tax return, or just have a
considerable amount of savings, this may be a wise financial decision. It will also dramatically decrease the amount
of interest you will pay over the life of your mortgage and thus save you
money. Just be sure your mortgage does
not include a clause that will penalize you, and then determine whether it is
still a good choice before going ahead.
The satisfaction a
homeowner feels when they make that last mortgage payment is really unmatched
by any other financial achievement, and following these simple steps can more
quickly make that dream a reality.
