Pay your mortgage as quickly as possible can save you thousands of dollars of interest. Besides that, pay your mortgage relieves a lot of stress without the big bill taking you each month. But paying your mortgage in advance needs careful planning so you can do wisely and more efficient ways to cost.
Many homeowners are choosing to pay your mortgage bi – weekly payments instead of the standard monthly payments. Even if you’re almost paying the same amount each month, the difference is that you are saving on interest of the increase. Besides that, pay every two weeks means you’re paying the equivalent of 13 payments each year (52 weeks) instead of the standard 12 payments you would be doing if you paid every month. Based on a 30 year mortgage of $ 100,000 with an interest rate of 7%, you can save almost $ 35,000 over the course of the mortgage and pay your house six years ago compared to monthly payments.
Use bonus money
Before making any payment of large sums on your mortgage, make sure your contract allows. Some may prohibit large payments or may have financial penalties for them. However, if allowed to do large payments regularly, use your bonus money or any other large amount of money you get periodically to apply to your mortgage. Christmas bonuses, tax refunds and birthday money from your grandmother can help you pay your mortgage several years earlier than you planned.
Make larger payments
Your financial situation usually improves in the course of a mortgage. Most people get in your business, get promotions or just get better jobs over the years. When this happens, discuss the possibility of increasing your payments with your mortgage lender. Even increase them for $ 50 or $ 100 each time you can afford will your mortgage sooner than you had thought.
Refinance at a lower interest rate
Refinancing is an ideal way to pay your mortgage faster way. If you have better credit than you had when financier first home, you are probably eligible for an interest rate lower. This means a lower total on the mortgage. However, when you do this, consider a shorter term for your mortgage. For example, if you have a 30 year mortgage now considered one of 15 or 20 years. Your payments are likely to be slightly higher, but you will save thousands of interest in the years ahead and pay your mortgage much faster than with a 30-year plan.