Pay Off Your Mortgage Faster
Ways to Pay Off Your Mortgage Faster
If you can meet all loan qualifications, afford higher monthly payments and cover additional closings costs, refinancing into a mortgage with a shorter loan term and lower interest rates is a great way to pay off your mortgage faster. For example, you could refinance from a 30-year fixed-rate mortgage into a 15-year fixed conventional, VA or FHA loan with a lower interest rate and pay off the mortgage much sooner while saving money.
Increased Monthly Payments
By contributing a bit extra to your monthly payments, you can pay off your mortgage faster and potentially save on interest. It’s essential that you consult with your lender first to establish the best way to make these increased payments and ensure that your additional contributions will be properly applied to the loan.
Extra Annual Payments
Instead of paying extra on a monthly basis, if you contribute one or more yearly payments to your mortgage you will still pay it off sooner and cut down on total interest paid. Again, it’s important to talk to your mortgage servicer and have them approve any additional payments.
Sometimes homeowners end up with extra income in the form of a tax return or yearly bonus or even an unexpected gain such as an inheritance or lottery win. If you don’t need this money for more pressing, essential costs, you can put it towards your mortgage and pay it off faster. However, it’s crucial to approach this situation thoughtfully and make sure that there isn’t a more important or effective way to use your new money.