Pay Off a Mortgage: Tips for Financing Your Home
The most common mortgage term is 30 years. To put that in perspective, if you borrowed $200,000 and mortgaged it over 30 years at a 5% interest rate you’d pay over $168,000 just in interest.
If you’re able to pay off a mortgage, you can focus on saving for the things you love most in life, from your kid’s college fund to a fun vacation fund. You can even get that sports car you’ve been eyeing up.
Are you a homeowner who is interested in paying off a mortgage and positively impacting your finances in the process? Here are a few tips that will help you get it done.
Take Out a 15-Year Mortgage From the Start
When you first go to take out a mortgage, a mortgage company is going to steer you in the direction of a 30-year mortgage. This is the most common kind of mortgage on the market today.
But you should know that you can also take out a 15-year mortgage if you would like. It’ll force you to pay a little more every month for your mortgage, but it’ll decrease the time that you’ll have to spend paying your house off.
Make Extra Payments on a Mortgage Every Year
Did you know that you could trim years off your mortgage repayment period by making one extra mortgage payment each year? If you can afford to do this, you should, by all means, attempt to do it since it’ll help you pay off a mortgage faster.
Even if you just round up your mortgage payments to the nearest $100, it’ll make a difference in how long it takes to pay it off. You can pay off your mortgage so much faster when you always have extra payments going in.
Refinance a Mortgage If a Better Interest Rate Becomes Available
Your mortgage company will assign you a certain interest rate on your original mortgage loan when you take it out. But you don’t need to stick with that rate for the life of your loan.
You should keep an eye on the interest rates over time. If they get to be very low, you might be able to refinance your mortgage and get access to a new interest rate that’ll allow you to pay off a mortgage much quicker than you would be able to otherwise.
You Can Pay Off a Mortgage in No Time by Taking These Steps
A big part of the home-owning process for most people is paying their mortgage every month. It’s the biggest bill that the average homeowner has.
You should try to get rid of this payment as quickly as you can by taking the steps listed here so that you can pay off a mortgage fast. You’ll feel free from the second that you’re able to cut ties with your mortgage for good.
Look for more home financing tips and tricks in our other blog articles.