Many Americans have the dream of homeownership. Owning a home is a great accomplishment, but it also comes with a lot of responsibility and shelling out a good amount of cash. While the majority of lump sum fees are paid beforehand with closing cost, appraisals, and inspections, your reoccurring monthly mortgage payment is a fee you will have until your mortgage is paid off.
Paying off your mortgage early can help you save a significant amount of money and offer the financial freedom to pursue other business and personal ventures.
Here are 3 ways to pay off your mortgage early:
Pay a little extra each month.
Paying a small amount in addition to your regular monthly payment will put you ahead of the game when trying to pay your mortgage off early. The extra amount doesn’t have to be large or entirely outside of your monthly budget. Even if you decide to pay an additional $100-$150, you are still on track to your goal. Just remember to check with your lender to ensure there are no penalties for additional payments.
Make lump-sum payments toward your principal.
Another great way to pay your mortgage off early is to make lump sum payments toward your principal. You can designate a tax return or a holiday bonus to go straight toward your principle, which will help you own your home outright much sooner!
Refinance your home loan
Refinancing your loan to get a shorter-term or a better rate is a sure way to be one step closer to the big pay off! Ideally, you can save yourself thousands of dollars and years of mortgage payments if you can switch to a shorter-term and a lower interest rate at the same time. Interest rates are historically low, and now is a great time to refinance. Rates won’t stay this low forever, so you should act now.
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