How To Pay Off Your Mortgage Early

How To Pay Off Your Mortgage Early



How to​ Pay off Your Mortgage Early
A mortgage is​ generally one of​ the​ biggest debts that a​ person faces in​ life,​ and a​ large part of​ that expense is​ due to​ the​ interest that is​ added on​ as​ time goes by .​
Most homeowners would gladly reduce that debt if​ the​ opportunity presented itself,​ though they do not realize that the​ key to​ reducing their mortgage debt lies in​ reducing the​ amount of​ interest that they pay on​ their mortgage .​
By paying off their mortgage months or​ even years in​ advance,​ all of​ the​ interest that they would have had to​ pay during that time obviously will not have to​ be paid .​
Also,​ the​ interest that will be paid will be at​ a​ reduced rate because they are reducing the​ total amount that the​ interest is​ applied to​ at​ a​ much faster rate.
The trick,​ of​ course,​ comes in​ figuring out a​ way to​ pay off the​ mortgage early .​
For individuals who live on​ a​ tight budget as​ it​ is,​ the​ thought of​ paying even more toward their mortgage may seem almost laughable .​
There are a​ number of​ ways that homeowners can pay down their overall mortgage in​ order to​ pay it​ off early without having to​ cause a​ strain on​ their finances,​ as​ well as​ services which can assist them in​ doing so if​ they aren't able to​ accomplish it​ on​ their own .​
Here are just a​ few examples of​ how a​ mortgage can be paid off early without causing undue financial strain.
Setting Aside Partial Payments
One easy way to​ pay off your mortgage early and possibly even make your finances easier to​ handle is​ to​ simply put aside a​ portion of​ your mortgage payment from each paycheck (or even from every other paycheck,​ if​ you​ get paid weekly.) If you​ put aside approximately half of​ your mortgage payment every other week,​ you'll end up saving the​ equivalent of​ an​ extra payment every year .​
Setting aside slightly more than half will cause an​ even greater savings,​ causing you​ to​ pay down your mortgage at​ an​ even faster rate .​
Depending upon the​ length of​ your mortgage term and when you​ start this savings plan,​ you​ can cut months or​ even years off of​ your mortgage .​
All that you​ have to​ do is​ pay whatever you​ have put aside each time your mortgage comes due (which should cause you​ to​ end up with a​ few payments that are significantly more than the​ minimum payment.)
Additional Payments at​ Tax Season
If you​ don't like the​ idea of​ having to​ keep track of​ savings over the​ course of​ the​ year,​ you​ might use income tax returns to​ help you​ to​ make up the​ difference .​
For many people,​ the​ amount that they receive in​ their tax returns is​ significantly more than their mortgage payment .​
While you​ may have at​ least some of​ your tax money earmarked for specific purchases or​ to​ pay off other debts,​ using part of​ that money to​ make the​ equivalent of​ an​ extra mortgage payment once per year can significantly reduce how much you​ owe .​
If you​ can afford to​ contribute more than just the​ amount of​ one payment or​ if​ you​ use this in​ conjunction with the​ savings plan mentioned above you​ can pay off your mortgage even faster.
Using Interest to​ Fight Interest
If you​ have a​ high-interest savings account,​ you​ can use that interest to​ help you​ pay off your mortgage ahead of​ time .​
Once or​ twice per year,​ pull out money from your savings that's equivalent to​ part of​ the​ interest that you've accrued and add it​ in​ with your mortgage payment .​
Provided that you​ have a​ high enough savings balance you​ should be able to​ make a​ significant impact on​ your mortgage debt by doing this .​
Over the​ course of​ the​ year the​ amount that you​ add to​ your mortgage payments could potentially equal an​ entire extra payment or​ more.
Bi-Weekly Mortgage Services
Should you​ worry that you​ can't keep yourself motivated to​ keep making these extra payments,​ you​ might consider using a​ bi-weekly mortgage service .​
These services automatically withdraw one half of​ your mortgage payment from your checking account every two weeks,​ and then make your payment for you​ when it​ comes due .​
The system works similar to​ the​ paycheck savings plan mentioned above,​ but since you​ have an​ outside company doing the​ work for you​ all that you​ have to​ do is​ make sure that you​ have the​ money in​ your account to​ cover the​ withdrawals .​
Though the​ services do charge fees to​ cover their costs,​ the​ amount that you​ save in​ interest payments will be significantly more than what you​ pay to​ the​ service.




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