How to Pay off Mortgage Early ?

How to Pay off Mortgage Early ?

Are you asking yourself this: How to pay off mortgage early ? Continue to read for having tips for your question. At least also there is a video for more ideas. Most of the time, problems in life infect our financial condition and even thrust it to an unfavorable position. We confront one such situation while paying our mortgage dues. Generally it takes a long period of amortization and we really wish when the period will be over and we will get a heavy sigh of relief. Paying scheduled payment is really a headache. Often the total interest that we pay throughout a longer span of time exceeds the principal mortgage loan. However, there are still some ways to pay off mortgage after regular interval as decided during the time of agreement and clear all the dues as early as possible.

Make Biweekly Payments – It is a good practice to divide your monthly payment and go for bi-weekly arrangement. This way you will make an extra payment each year which will shorten the amortization period by 6-8 years. The faster you get relief from the loan burden, the better. However, all the lenders do not offer such option and some also charge extra for split-up payment.

Make an Increase in Payment – It is definitely a good solution to increase your monthly installment. So that amortization period gets shorter. I am not suggesting you to make a massive increase. But you can certainly raise the bar within your affordable limit. If your affordability allows you, then try to increase the payment by 1/10th-1/12th of your current monthly installment. This will chuck at least 8-10 years off the total duration of loan clearance.

how many extra mortgage payments to pay off early
how many extra mortgage payments to pay off early

Mortgage Refinancing – The mortgage loan holders are often recommended to go for mortgage refinancing. By dint of ‘remortgage’ option, you not only reduce the amortization schedule but can effectively avail lower interest rate. It indicates that there is a thick chance for your monthly payment getting smaller and you do not need to bear the mortgage loan burden longer.

Paying off Principal – You may have noticed that over the years the figure that you have paid as interest is closer to the principal loan volume. There are years to go to clear all the dues and by that time the total interest made towards loan payment will exceed the principal by a significant margin. You may have a talk to your lender and if he is agreed then send him some extra payment if you are able to do so. Make it sure to check what effects the ‘extra money’ leaves on your tax payment as mortgage interests come under the bracket of ‘tax deductibles’.

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