If you’re like many Americans with a mortgage, you’re probably looking for ways to pay it off sooner. You’re in luck! Below are some great tips to help you reduce your principal and eliminate your mortgage debt faster, so that you have more money in your bank account for retirement, investments or a relaxing tropical vacation. If you’re among the one-in-three lucky homeowners who have paid off their mortgage, forward this information on to family or friends who are seeking to pay off their mortgage debt.
1. Make Bi-weekly Mortgage Payments.
Making bi-weekly mortgage payments amounts to 26 half payments each year instead of the more customary 12 full payments. This allows you to make an extra full mortgage payment each year! It may not seem like doing this would make a huge difference, but over time it allows you to pay your entire mortgage sooner and save lots on interest payments!
2. Increase Your Mortgage Payment.
If your income has increased since you first obtained your mortgage, consider making an extra payment toward principal each month in keeping with your income. Doing so will help you pay less overall and shorten the length of your mortgage. If you'd like to look at it another way, it may also lower your monthly mortgage payment amount over time.
3. Make Additional Mortgage Payments.
If making regular contributions to your principal payment isn't feasible at this time, consider making an extra payment toward principal when you do have a little extra money. Believe it or not, this will still make a big difference in the total amount you spend over time.
4. Refinance with a shorter term Mortgage.
If you have a 30 year mortgage at this time, you could consider refinancing for a 10, 15, or 20 year mortgage. Yes, the monthly payments will be a little more, but you'll get out of mortgage debt years earlier too.
These strategies aren't for everyone. You may have your own reasons for wanting to keep some cash liquid rather than pouring it into your home. However, it might be worth your time to consider even little ways to save money that would otherwise be spent on mortgage interest.
The Steel Team helps buy and sell homes of all kinds. But we also provide valuable expertise in all the other areas of home ownership when we can. Don't hesitate to reach out to us with any questions you may have. If we don't have the answers, we will get them for you.