Because interest rates these days are so low compared to where they were 20 years ago, the incentive to pay off a mortgage faster is not as strong today as it was then. But there are still plenty of benefits in crawling out from under a mortgage early. The question though, is how do you do that? Below are some of the best how to pay off a mortgage faster tips you’ll find.
HOW TO PAYOFF A MORTGAGE FASTER TIPS
Paying down a mortgage faster than you have to can have a lot of long-term benefits. Here are 5 ways you can do that.
1: Pay Extra Every Month – We’re leading off with this one because it’s so painfully obvious. If you have the money and can afford to do so, making larger than required payments every month is the easiest way to pay off a mortgage faster.
2: Make Bi-Weekly Payments – If you make 1 payment every month that’s 12 payments per year. But if you make half a payment every 2 weeks that’s 26 payments per year, or the equivalent of an extra payment each year.
3: Refinance With a Shorter Term – If your financial situation improves and you can afford the larger payments that will be involved, consider refinancing with a shorter-term mortgage. The larger payments may sting a bit but it could be worth it in the long run.
4: Make Extra Payments Whenever Possible – Anytime you have extra cash put it toward the mortgage. If, for instance, you receive a year-end bonus, or if someone leaves you money in their will, put it toward the mortgage.
5: Rent a Room – Make a room available on Airbnb or a similar service and put any income from that room toward the mortgage.
NOTES OF CAUTION
Before deciding to act on any of these tips make sure there are no prepayment penalties that could negate any benefits. Also, it may be wiser in the long run to invest any extra income rather than putting it toward the mortgage. Call Mortigo to discuss any of these how to pay off a mortgage faster tips before deciding to do so.