How To Pay Your Mortgage Off Faster
More than two thirds of American homeowners are currently making mortgage payments, while one third own their homes outright. How can you make the jump from monthly payments to paid-off? Follow the tips below to get there faster.
Commit to Making One Extra Payment Per Year
Depending on your interest rate, this simple move can shave between four and seven years off your mortgage payment timetable. Some homeowners choose to use their tax returns to make the extra payment in a lump sum once a year, while others divide their monthly payment by twelve and add that amount to their payment each month.
Round Up Payments to the Nearest Hundred
Want to pay a little extra each month without breaking the bank? Consider rounding your payment up slightly. For example, if your mortgage payment is $1,015, round up to $1,100 instead. That extra $85 per month adds up to more than a thousand over the course of a year, helping to shave years off your payment plan.
Refinance to a 15-Year Fixed Loan
If you’re like the majority of homeowners locked into a 30-year mortgage, it can seem like an eternity before you’ll be debt-free. Consider refinancing to a 15-year fixed loan instead. You’ll make larger monthly payments, but you’ll save thousands of dollars in interest over the life of the loan. Just make sure to account for closing costs associated with refinancing.
If you’re ready to own your home, rather than being “owned” by your lender, take one or more of the above steps today and pave the way to a mortgage-free lifestyle.
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