Paying More Equals a Paid Off Mortgage

Paid Off Mortgage in OgdenYou can get the home of your dreams with a mortgage. Once you do, you will naturally have to pay off your mortgage until you completely own your house.

Now, you may be inclined to simply follow the mortgage plan by paying the required amount regularly. Fortunately, you can pay off your mortgage faster, saving money in the long run.

Extra with the Regular

The easiest way to pay off your loan faster is by paying more. You can pay more by adding to your regular minimum payments. Bankrate.com gives an example: You can add a 12th of your monthly payment and pay off a $200,000 mortgage at a 4.5% rate three years earlier than scheduled.

Additional Payments

You can even pay multiple times if you want to. Perhaps every two weeks? Small, multiple payments in a month are also possible. You can also pay a large amount at least once a year. You will have to make sure, however, that your payments will be credited to your loan.

Shorter-term Refinance

Instead of extra payments, you can consider a home refinance, Wasatch Peaks Credit Union suggests. Refinancing to a shorter-term can lead you to pay off your loan a decade earlier. With a lower rate, you will also save a lot more. For this plan, however, you will have to apply for a new mortgage again. Closing costs are also an additional factor.

Another Source

When you have an another source of income like a small side business, bonuses, or freelance work, you can channel what you earn into your mortgage. It is just like making additional payments.

Frugality

The last possible way of paying off your loan is a lifestyle change. You can cut down on your living expenses, avoid luxurious purchases, and buy only what you need. The frugal lifestyle may be difficult, but if you are determined to pay off the loan, it will be worth it.

It may be difficult to live a life with debts, which is why the sooner you pay off your mortgage, the better off you will be.