What can even be more refreshing than knowing that your mortgage is finally paid off? Having the funds to do whatever you want without worrying about your loan is great. It’s possible to reach that goal ahead of schedule with a few home finances. Making more than minimum payments, setting up automatic payments, and making bi-weekly payments are all sound strategies for paying off a mortgage faster. But what can we do to pay off our mortgage faster and leave nothing but satisfaction in our wallets? Lucky for you, we share several money-saving tips to help you pay off your mortgage early.
Make a One-Time Lump Sum Payment
Making a one-time lump sum payment is one of the most effective ways to pay off your mortgage faster. This type of payment will apply to both principal and interest, so be sure you know how much interest you will be paying each month. Depending on the size of your payment, this could shave years off your repayment schedule. What can be even better is that this payment can be tax-deductible, depending on your situation.
Pay Extra on Your Mortgage Every Month
It’s not rocket science that if you pay more each month, your loan will be paid off faster. A great way to do this is by adding a few extra payments throughout the year. For example, instead of making 12 mortgage payments per year (one per month), add an additional payment every 4 months. This strategy can save you time and money in the long run. Moreover, even if you don’t have the extra funds to make a lump sum payment, making more than the minimum monthly payments can still help you pay off your mortgage faster.
Refinance to a Shorter-Term Mortgage
The best way to get rid of your mortgage quickly is to refinance it to a shorter-term loan. This may sound counter-intuitive at first, as you would think that increasing the loan term would reduce payments, but this isn’t always the case. With some lenders, refinancing to a shorter-term loan can actually lower your interest rate and save you money over the life of the loan. And, since you are reducing the time it takes to pay off your mortgage, you will save money in the long run.
Do Some Side Hustle and Save More
If you want to get your mortgage paid off quickly, consider taking on a side hustle. A side hustle can provide you with extra income that can be used to make additional payments towards your mortgage. Additionally, if you can save more each month, you can use that money to pay down your loan and reduce the amount of interest you pay in the long run.
No matter how you look at it, paying off your mortgage can be a daunting task. But by implementing these strategies, you can make it easier and faster. With some patience, planning, and wisdom, you’ll be able to get out of debt sooner than expected. After all, reaching your financial freedom isn’t possible without getting rid of your mortgage first.