A mortgage payment is just a fact of life for many people. However, it doesn’t have to be. Especially as people get older and get closer to both retirement and paying off their home, the idea of having no mortgage and owning their home free and clear becomes more of a potential reality and less of a pipe dream.
There are actually a couple ways that you can pay off a mortgage faster. We’ll go over your options so you can decide if paying off your mortgage early is right for you, plus decide which is the best way for you to achieve that goal.
It may seem a little counterintuitive to get a new mortgage in order to pay off your mortgage faster, but it’s actually an ideal option for lots of homeowners. The trick is that you refinance for a shorter period, likely lowering your interest rate and other associated fees significantly. This oftentimes means that your payments don’t even need to go up very much (or sometimes at all) for you to pay off your mortgage early.
This is a great option for people with good credit scores, especially those who have substantially improved their credit over since getting their mortgage. This is because the terms offered to you will be even better, saving you more money and time paying a mortgage payment.
Make Extra Payments
If you’d like to take a more informal approach to paying down your mortgage balance and getting it paid off early, making extra payments towards your principal (the actual loan amount) is a great option for you. Be sure that you check with your mortgage company about their policy on extra payments as some charge fees for prepayments or only accept extra payments on their own schedule. You can make these extra payments as often as you’re able.
Many people find that, as they get older and kids leave the house, they don’t necessarily need as much space. It might be the perfect time to find a smaller, more affordable home. You can then use the equity built up in your current home to make a big down payment and possibly finance your new, less expensive home with more favorable terms.
All these options can help you pay off your mortgage faster; you’ll just need to choose the plan that works best for you and take action! To see if paying off your mortgage faster is right for you shop below.