For some homeowners, they were able to buy their dream home thanks to the help of mortgage financing. Most borrowers opted for the traditional 30 years. But what if you’re ready to pay more than your original monthly mortgage? Would it be possible to pay off your mortgage early?
The simple answer is yes. While paying off your home loan in full seems only like a dream, you can always shave off a year or more from your mortgage term. This gives you the advantage of saving money from high-interest rates and increasing your equity in the process.
But should you pay it off early? The answer depends on your current financial situation and your long-term plans. If you’re thinking about investing your money elsewhere, then you can just let the mortgage term run its course. Otherwise, you can choose to pay down your home loan early.
Good Read: Should I Invest Or Pay Off The Mortgage?
If you’re one who plans on paying down your mortgage faster, here are a few simple tricks you can do.
Talk To Your Lender
First, talk to your Mortgage Lender Plano about your plan in paying off early. They can give you an idea of how to accomplish this. It helps that you tell them your plans to clear the fact that any additional funds they will receive are for you to pay them back earlier. Make sure there are no pre-penalty payment fees so you can avoid extra costs over time.
Go For A Bi-Weekly Payment
When it comes to mortgages, borrowers are to pay for their mortgages each month until all dues are paid off. By switching to a bi-weekly payment instead of a monthly payment plan, you get to spread your cash flow demand. It slips into an extra monthly equivalent each year, reducing your time to pay down your mortgage.
Make Extra Payment For The Principal Amount
Another way to pay down your mortgage loan faster is by making an extra principal payment whenever you can. By paying an extra payment, you can call tel your Mortgage Lender Plano that the additional payment you make is for the principal amount. This way, you can pay down a little bit of the principal amount each year, saving you a lot in interest fees.
Consider Refinancing Your Mortgage
When you refinance your mortgage, you get to shorten the time it takes to repay your loan and change your mortgage into one with lower interest rates. It allows you to pay off your home loan earlier by drafting a new mortgage. However, shortening your loan term will require you to pay higher monthly mortgage fees.
Good Read: When (and When Not) to Refinance Your Mortgage
Take Advantage Of Your Tax Refund
Being a homeowner comes with lots of perks. One of these is amazing tax benefits. By taking your tax refund and using it as an extra-large payment each year, you can pay your mortgage earlier.
Look For An Additional Source Of Income
If you want to finish paying off your lender, then you’ll need to make extra payments. By looking for ways to add in your monthly income like renting out your space, you’ll have somewhere to get the funds from.