We all know how big a step it is to own a home. A car is one of the biggest purchases you will make in your life, if not the biggest. The mortgage on your home will also be the biggest debt you have in your life. There are times when the weight of your debt can make you want to scream. When you pay your monthly home mortgage bill, you discover that you are mostly just paying interest. Paying off your mortgage as quickly as possible is possible with a little planning. Paying off your mortgage fast will save money on your home mortgage.
How to pay off your home mortgage fast
If you are shopping for a home start by improving your credit so you can get a better rate. As you pay off your debt over time, you will be better off if you can get a lower interest rate. By saving up a large down payment for your home, you’ll be able to reduce your interest rates as well.
Since you got your home mortgage, chances are you have improved your credit and now may be a good time to refinance at a lower interest rate. Refinancing is a great way to reduce the interest you are paying and pay your mortgage off fast.
Start paying more on your home mortgage
To pay off your loan faster, contact your mortgage provider and ask how additional payments can be applied appropriately. Check your statement to make sure the extra money was applied to your loan and not to the interest.
Can’t afford to pay extra each month? Adding an extra payment each year would be a good idea. Either paying extra monthly or yearly the same concept applies. Stay on top of things and be sure it is applied to your loan the way you want it to be.
Even if this seems small, if you save 1/12th of your monthly payment you will be able to save enough to cover your monthly payments. In 12 years you will have paid 13 years of your mortgage. For a nearly painless method of paying off your mortgage faster, this is not too shabby.
Put extra money into your mortgage. Have you filed your taxes? Make it work for you by paying into your home mortgage with your tax return. Occasionally, you can get money back from your tax refunds and other sources at the end of the year on your home mortgage. You can apply that money straight back to your mortgage principal.
Have a back up plan
Life happens and things don’t always go as planned. You can be doing great on paying off your mortgage early only to be hit with a new challenge like losing your job. This can put a damper on your plans and even take you from ahead of schedule to behind in a matter of months. Purchasing loan payment insurance is a great way to help ensure that you will be okay if something stops you from being able to pay your loan for a few months.