Mortgage payments can be a huge drain in a homeowner’s budget. This is true especially if the home loan is eating up a large chunk of the person’s income. While homeowners can keep on making monthly payments until the end of the mortgage term, it is possible to pay off the mortgage early and save thousands of dollars on interest payments. If you are committed to paying off your mortgage early, keep these things in mind to accomplish your objective.
Obtain a 15-Year Mortgage
While standard mortgages last for 30 years, it is possible to go for a shorter 15-year mortgage. While your monthly payments will obviously be higher, you can expect the interest rate to be a bit lower. This means you pay a lower interest rate for a shorter period. Here’s a tip: Primary Residential Mortgage, Inc. Fort Myers has a useful mortgage calculator that can help you figure out how much you need to pay every month.
Make More Frequent Payments
Individuals typically make a mortgage payment every month. Instead of sticking to the usual routine, see if you can change the payment frequency from monthly to biweekly. By paying more frequently, you would be able to finish paying off your home loan in no time.
Throw “Surprise” Money to Your Mortgage
If you have received surprise money, such as a tax refund or a bonus, you can use it to pay off your mortgage. This move may shave years off your home loan.
Getting a 15-year mortgage, making more frequent payments, and throwing surprise money into your mortgage can help you pay off your mortgage early. If you are motivated to pay off your home loan early, remember to get in touch with your lender to make sure that any extra contribution you put in goes to your principal and not to next month’s payment nor to the interest. Don’t forget to check if there are prepayment penalties that you’ll need to consider when you pay the mortgage off early.