Your home is likely both your greatest asset and your biggest financial liability. Mortgage payments consume a large percentage of your annual income, but if you pay off your mortgage early, you can enjoy the freedom of living without creditors. You can employ many different strategies to pay off your mortgage early, be sure to discuss with your mortgage broker to help determine what is right for you.
1. Refinance to a Lower Rate
If your mortgage has a high interest rate, you can realize significant savings by citrusnorth debt relief online service to reduce your interest rate, or some top-rated reverse mortgage refinance tool. Your reduced interest payments will help you pay off your principal sooner.
2. Reduce the Length of Your Mortgage
Even if your interest rate is already low, you can reduce the length of your mortgage to save money and pay off your mortgage sooner. However, if you employ this strategy, make sure that your monthly budget can absorb a higher payment.
3. Make Annual Jumbo Payments
Most of your monthly mortgage payment goes towards interest. However, if you make payments that are larger than usual, the extra funds will go towards the principal of your mortgage.
4. Make Biweekly Payments
Instead of paying your mortgage once a month, pay it every two weeks. Over the course of a year, this will effectively turn into an extra mortgage payment, reducing the size of your principal.
5. Round Up Your Payments
Round up your mortgage payments to the nearest even number. If your official mortgage payment is $1,059.67, pay $1,100 every month. Even this modest adjustment can help you pay off your loan sooner.
6. Increase Your Mortgage Payment Over Time
If you expect that your income will increase over time, increase the size of your mortgage payment each month. Even if this increase is modest, the cumulative effect can shorten the length of your mortgage.
7. Invest Windfalls Into Your Mortgage
If you receive unexpected financial windfalls, put the money into your mortgage. Your budget was created without those windfalls in mind, so applying them to your mortgage is a pain-free way to shorten its lifespan.
8. Pay Down Other Debts
Concentrate on eliminating high-interest debts. Once you’ve handled those debts, you can use the money that you were spending on those debts to pay down your mortgage.
9. Invest Your Money
If your mortgage’s interest rate is low, you might be better off investing your money in a high-yield investment account. As your investments grow, use the proceeds to pay off your home.
10. Downsize Your Home
If you have more home than you need, you can sell your home. Use the profits from your home sale to buy a smaller home and pay down your mortgage debt.