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Your mortgage is one of the biggest expenses of your life, so it makes sense that many people look to pay it off as quickly as they can afford to. If you are an individual with a good credit score, have been investing in your retirement, and have an emergency savings account, paying off your mortgage earlier than expected may be a good idea. Learn different ways to pay your mortgage down below!
Not only will you accumulate less interest and save money, but making an extra payment four times a year can save you years on your mortgage. For example, if you have a $220,000, 30-year mortgage with a 4% interest rate, making an extra payment each quarter will save you $65,000 in interest. In addition, you will pay off your mortgage in 19 years.
Thirty years is a long time to be in debt. If you can afford it, refinancing your 30-year mortgage into a 15-year one will help save you thousands of dollars in interest. If you already have a low interest rate and do not want to give it up, skip the refinancing process and double your payments every month to cut your remaining time in half.
Canceling your cable, bringing lunch to work everyday, or simply making your morning coffee at home can help you save hundreds to thousands of dollars every year. This extra money can be used towards additional mortgage payments. In addition, pay raises or bonuses can be put towards your monthly payments to help pay your mortgage off faster.
If you can’t afford to make an extra payment every quarter, it may be a good idea to switch to biweekly payments. By making half of your monthly payment every two weeks, you make a total of 13 monthly payments. This can help save you up to six years on your 30-year mortgage! Because some loan providers charge a fee to set up biweekly payments, be sure to contact your loan officer at the branch nearest you to discuss your options.
Everyone’s financial situation is different. If you’re exploring your options on how to pay off your mortgage early, it is best to contact a loan officer for expert advice. Here at Home Point Financial, our professionals will talk with you to learn about your individual situation and provide the best course of action based on your needs. For more information, please contact us today.
Crunch the numbers for yourself to discover your monthly payment, total cost of loan and more.
Rates are still near historic lows. It’s not too late to refinance to lower your monthly payments.
Our New Homebuyer page is full of information you need to get comfortable with the process.
Simply share with us a few details to begin and we’ll find the right financing for your particular needs.
